The reasons why

This was the year when the Republic's unemployment rate fell below the EU average for the first time in well over a decade. Even better news came in the Labour Force Survey, which showed the number of people working at its highest level in the history of the State. There are now more than 1.3 million working in the Republic, compared to 1.1 million five years ago.

While such figures are likely to cheer up the State agencies and the Government, beneath the surface the pattern of job creation has been a lot more uneven and there are worries that poor roads and congested cities may cause problems next year.

While this year has been characterised by the arrival of several multinational software companies, other less hi-tech industries have found themselves undercut by Far Eastern competitors.

One sector which had a poor year was textiles, where several leading companies went to the wall. The loss of the Klopman factory in Tralee, where 1,000 workers were once employed, came as a severe blow to the whole industry.

While the final closure was widely predicted, the explanation given by the company's European president - that it was too small an operation to survive international competition - echoed the key problem for the sector nationally.

A similar point was driven home in the west when the Asahi plant in Killala, Co Mayo, finally succumbed to 20 years of accumulated losses, closing with the loss of 320 people.

Atlantic Mills, the denim manufacturer was forced to seek 100 redundancies at its plant in Co Longford, and another 100 at its spinning operation in Tullamore, Co Offaly.

The reason given here was "severe global competition from low-cost producers in the Far East". Meanwhile, there were mutterings that competitiveness was being lost at the State's biggest textile employer, Fruit of the Loom, in Donegal.

In fact some sources said this was the reason that managing director, Mr Willie McCarter, was removed from his position by the company's American parent.

One of the reasons the loss of jobs in the textiles industry alarms policy-makers is because it's one of the few industries not concentrated in the main cities.

The main competition, which may cause further job losses next year, comes from low cost economies like China, India, Morocco, Turkey and Eastern Europe.

Rising manufacturing costs in the Republic will need to be addressed before such competition can be properly dealt with, the Irish Clothing Manufacturers Federation said during the year.

While most parts of the electronics sector did well in 1997, the labour intensive, information storage area, was put under severe pressure, with Seagate only one of several casualties of ferocious international competition. Eastman Kodak had to review its operations, AST Computers, who make computer components, let 90 people go, with considerably more expected to be layed off at the time of going to print and Applied Magnetics layed off 120 people at its plant in Coolock.

The closure of Seagate was the most stark reminder of how computer manufacturing depends on low costs. The simple explanation behind the 1,400 redundancies was that Seagate had a problem of spare capacity and therefore had to cut back.

The problem of over supply in the computer hardware area, four of the 27 million new hardware units produced worldwide came from new suppliers this year, looks set to continue next year and operations similar to those mentioned above, could be threatened.

One company which has already forecast a sharp cut in profits next year due to a glut is Dundalk-based Quantam, which employs 400 people in Dundalk. According to the IDA, three-quarters of the jobs created in 1997, were in the computer industry, particularly in software. As one IDA official put it, "we thought 1996 was the year for software, but the growth this year has even surpassed that".

The statistic which brought this home above all others was proclaimed by the Tanaiste, Ms Harney during one of her visits to the United States, when she pointed out that over half of all US overseas software investment now ends up in the Republic.

The interesting element of this years tranche of software jobs was they were more regionally spread than the year before, with Cork the beneficiary of several large job announcements, among them EMC Corporation, Motorola and Computer Products.

Much of the new jobs and expansions by existing companies came in the form of software development centres, with Accuris Telecom Software Solutions, Motorola, Telenor, AND Corporation and Symantec Corporation among those setting them up.

These companies and others cited the availability of skilled labour and suitable greenfield sites as the reason for their decision to come to Ireland.

As was the case in 1997, the greatest challenge facing the software sector will be the skills shortage. It is a challenge the Government is anxious to overcome, especially in the light of the statement from the National Software Directorate this year that if sufficient graduates are produced, the industry could employ well over 20,000 people by the year 2000. One of the most surprising job creation success stories of the year was in the healthcare and pharmaceutical industries.

According to the IDA about 3,000 jobs were created in this area by companies assisted by the State agency.

The biggest was Boston Scientific, which created 1,000 jobs in Galway and 1,050 jobs in Cork, producing live-saving medical devices.

Once again a skilled and flexible workforce was said to be the reason for the company's choice of Ireland as a location. The company's decision is likely to inject several million pounds into the local economy through spin-off jobs for sub-suppliers.

Warner Lambert announced that it was setting up a tabletting facility in Ringaskiddy, Co Cork, and the IDA was very pleased because it meant the Republic was chosen over several other European states.

A growing market for eye-care products meant a £43 million expansion in Waterford by Bausch and Lomb, creating 650 jobs. While the company expressed satisfaction with the local labour force, the company's European vice president, James Kennedy, said the Government needed to step up investment in the road network and the regional airports.

This was echoed by Boston Scientific officials who expressed concern Galway airport might not be able to fulfil their distribution requirements.

Alongside the skill shortages question, the lack of investment in infrastructure is likely to pose the biggest obstacle to expansion in this sector next year.

This year saw the continuing growth of the teleservices industry, with large numbers of call centres setting up in the Dublin region. It is estimated that next year will see between 2,000 and 3,000 jobs being created in the sector.

The second half of this year saw companies like the Merchants Group, Flightbookers, Oxford Health Plans and GE Capital Services, seeking to recruit people with just an English language fluency for their call centre operations. This represented a new trend in the industry and made new jobs available to second-level graduates, as well as third level graduates.

Recent developments in the industry like universal freefone have come as a big boost, but the move into English-language call centres, however, pits Ireland against various regions in Britain and this may prove difficult next year.