State jobs the key driver of employment jump this year

A report on the jobs market is included in Bank of Ireland’s Economic Outlook for Ireland 2024/2025 published today.

The overall numbers are positive, with a record average of 2.45 million people employed in the first four months of 2024.

However, the new report found public-sector dominated areas counted for over 50pc of jobs gains in the first four months of 2024, with public administration and defence (5.1pc), education (2.4pc), and human health/social work (5.4pc) all seeing strong gains.

Multinational-sector employment fell slightly (0.3pc) to 300,583 in 2023, but it was a first fall since 2009 and in the early part of this year information and communication jobs, which also tend to be skewed to the sector, were down 3.8pc. Indigenous sectors such as construction (3.5pc), transportation and storage (5.5pc), wholesale and retail (1.4pc) saw solid gains.

Unemployment is tipped to remain low this year, even amid a slow down in new jobs.

Meanwhile, housing completions will hit 40,000 next year and pass 45,000 in 2026, according to a new analysis from Bank of Ireland.

That would exceed the 44,000 homes that ESRI estimated structural demand is likely to peak at between now and 2030, depending on migration levels and other factors, in a report this week prepared for the Department of Housing.

Bank of Ireland chief economist Conall Mac Coille thinks his forecast homebuilding levels will still likely fall short of demand, meaning house prices will continue to rise, up an expected 4pc in 2024.

Overall, the bank sees economic conditions improving here this year, including a boost for consumers as wages now outstrip inflation, lifting real incomes even though official growth looks set to slow.

Bank of Ireland has revised down its estimate for gross domestic product (GDP) growth for this year and next year.

The bank is now forecasting growth of 1pc in 2024, down from 1.5pc in its February Outlook, and sees growth next year at 3.9pc rather than the 4pc rate previously forecast.

It is even possible the economy could contract for a second year in a row.

However, the adjustments reflect what are described as artificial measurement distortions related to the multinational sector. The prognosis for the domestic economy is much better with positive outlooks for each of consumer spending, jobs and domestic demand.

However, a key risk to the economy is of potential “overheating” caused by pressures in areas such as housing and infrastructure bottlenecks and labour shortages.

Overheating occurs when demand outstrips the capacity to meet it, driving up prices, sucking in resources from other areas of the economy and ultimately driving down competitiveness.

For now, inflation and wage gains here have not stood out from the rest of Europe – suggesting little threat to competitiveness, the report says.