Thursday, 19 May 2022
Department of Finance
The COVID-19 pandemic had a severe impact on Ireland’s labour market, with the number of persons in receipt of some form of state income assistance peaking at around 1.2 million in May 2020. More recently, the Government’s labour market policy response, which effectively maintained the employer-employee link to prevent labour market scarring, has paved the way for a rapid recovery in employment.
Indeed, since the phased re-opening of our economy and society at the start of April 2021, the number in employment has increased to the highest level on record, with more than 2.4 million people at work in the final quarter of last year when adjusted for recipients of the pandemic unemployment payment.
The headline unemployment rate fell to 4.8 per cent in April and demand for labour remains robust, with data from online recruiter Indeed.com showing total job postings around 50 per cent ahead of their pre-pandemic level. This is a remarkable outcome, and speaks to the effectiveness of the Government’s economic policies which served to protect incomes, jobs, and businesses.
Forecasts published by my Department with the Stability Programme Update (SPU) in April project strong employment growth in the short-term. While comparisons on an annual average basis are impacted by containment measures during the first quarter of 2021, a significant number of jobs are forecast to be added throughout this year and next. For instance, by the end of 2022 more than 50,000 jobs are projected to have been created when compared to the fourth quarter of 2021. For next year as a whole, an additional 50,000 jobs are expected to be added on average compared with this year. Over the medium-term, employment growth is projected to moderate to just under 2 per cent as the economy moves closer to full employment.
Although the most recent labour market indicators point to continued momentum, risks to the outlook remain, not least the continued international uncertainty and the potential for further fallout from the invasion of Ukraine.