IBEC has predicted that 2012 is likely to be the last year of falling employment, with pressure easing as cuts to public sector numbers recede and the rate of decline in the domestic economy slows.
In its IBEC Jobs Report, published yesterday, it argued that employment should stabilise from 2013 onwards, but that a robust domestic recovery would not take place until 2014 at the earliest. The group called for Government to take decisive action to support job creation in the upcoming Budget.
The IBEC Jobs Report analyses the various national employment statistics, data from IBEC surveys and job announcements to provide an overview of employment trends in the economy.
The report says that 20,000 new jobs have been announced so far this year, but the effects of the banking and public sector redundancies are likely to mean that headline employment data will remain volatile in the coming quarters, masking the tentative recovery that is taking place in the private sector.
The number of private sector employees grew in Q4 2011 and Q1 2012, and recorded only a marginal decline in Q2, despite a more challenging external environment.
The jobs vacancy rates are high in financial services and the ICT sectors, while business areas facing the domestic economy have the lowest vacancy rates.
Commenting on the report, IBEC senior economist Reetta Suonperä said: “Tackling unemployment is the key challenge facing Government, and this needs to be reflected in the measures taken in Budget 2013. The most damaging thing Government could do would be to add to the cost of employment. If employment costs rise, companies will be much less likely to take on new staff. The private sector is the engine of the economy and it is vital that the Government does not undermine its ability to drive growth and create jobs.
"Overall, 2012 is likely to be the last year of falling employment as the impact of cuts to public sector employment recedes and the rate of decline in the domestic economy slows. Next year should see a stabilisation, with a very marginal increase in employment. However, any recovery is predicated on the Government not adding to the cost of employment.”