JOBS GROWTH WILL only come at a “moderate pace” in the coming years despite Ireland’s economy delivering a massive increase in output.
But the employment picture still appears bleak for young workers, who continue to drop out of the workforce in big numbers through emigration or choosing to stay in school.
In its latest quarterly update, the Central Bank delivered a downbeat jobs outlook – predicting the average jobless rate would be 10.4% this year and 9.3% in 2016.
The latest unemployment rate, based on Live Register figures for December, was 10.6%.
The Central Bank said it expected recovery in the jobs market to “continue at a sustained if moderate pace”, although the country’s employment outlook was notoriously hard to predict because of the “variability of migration and the unpredictability of the participation rate”.
Shrinking labour force
About 37,000 fewer people were jobless in 2014 that the previous year, but the labour force also shrank by 7,000 as people left the country or stopped looking for work.
The Central Bank expects another 22,000 people to leave the ranks of the unemployed both this year and the next.
It said the jobs market still looked “weak” for those aged 15-25 with a big fall in the labour force for most of 2014 because of migration and “a higher tendancy to be in education”.
However, in some good news, the Central Bank said long-term unemployment was falling at a faster rate than the short-term jobless.
“Employment growth across the country was also more balanced geographically in the third quarter (of 2014), with an increase in the rate of employment growth in the Border, Midland and Western regions,” it said.
What about pay?
The Central Bank also predicted small rises in average pay over the next two years – worth about 2.2% both this year and in 2016.
The rise in wages, despite the still-high unemployment rate, would mainly come because of an increase in the number of full-time jobs.
But it also forecast a slight increase in consumer-price inflation, which would eat up some of the benefits of any across-the-board wage pay rises.
At least there’s the economy
The Central Bank was much more bullish on its economic forecasts, predicting the final economic growth figure for 2014 would be 5.1% and strong rises in GDP would continue this year (3.7%) and 2016 (3.8%).
“The recovery of the Irish economy has broadened and gained momentum over the past year,” it said.
“Recovery has been led by strong growth in exports and investment, and is also being supported by the resumption of growth in consumer spending.”
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