Mr. Ciar?n Nugent:

We discussed this earlier in terms of where those constraints are and I do not want to disagree too much with what has been said. The employment rate is equal to the highest level reached in quarter 3 of 2007, which was the record. However, the groups to which this applies are different. Younger people are less likely to be in employment at the moment than they were in 2007 and older people, especially women, are more likely to be in employment. The average reach is about what it was then.

In terms of specific infrastructure areas that we need to address in construction, there is capacity there. Wages have not kept up with inflation. Overheating is a highly theoretical concept, based on the undefined concepts of a natural rate of unemployment and of full employment. We have been hearing a lot that we are past full employment over the last while which I personally consider a very good analysis.

Some of my own research is on pathways to employment and third level education. There is a good argument that if the labour market opportunities in construction were better, or at least similar to what they were 15 or 20 years ago, then we would have fewer people opting for third level education. There is also a good argument that we do not need as many people in third level and that a rebalancing is required to attract more young school leavers into construction. Young males in particular are down in terms of their participation in the labour market compared to that time. There are constraints and issues there but there are certain areas where, from my perspective, we are not overheating.

The debate in this area is ongoing. Myself and Dr. McDonnell regularly discuss the job vacancy rate as an indicator of how hot we are getting, how dynamic the Irish labour market is and how much opportunity there is out there but we are consistently below the EU average, even with our positive numbers over the last two years. It is still the case that there are not actually that many vacancies in a relative sensevis-á-visEurope. Wages are not keeping up with inflation and the debate will continue.