Building sector drives job creation - CSO

Job creation reached its highest level in four years in 2004, with the construction boom accounting for about 40 per cent of all new employment.

Figures released by the Central Statistics Office (CSO) yesterday show that the number of people in work grew by 65,200 to almost 1.9 million over the course of 2004.

This was the highest jobs growth to be recorded since 2000, and offers the clearest evidence so far that the economy was in good health last year.

The CSO said unemployment remained steady at 4.4 per cent - the lowest level in the euro zone - in the final months of the year.

The biggest driver of employment growth last year came from the construction market, which was in turn boosted by record levels of housebuilding.

Average data for 2004 show that construction employment swelled by nearly 10 per cent, or 19,100 jobs, over the year.

The rate of increase strengthened as the year progressed, climbing from 7.2 per cent in the first quarter to 13.4 per cent in the three months to the end of November.

The pace of construction jobs growth and the sector's overall contribution to the economy have given rise to some concerns over the past few months. Some commentators fear a sharp downturn in the jobs market as the pace of housebuilding starts to slow in 2005.

Alan McQuaid, chief economist with Bloxham Stockbrokers, did not take such worries on board yesterday, suggesting that a step-up in services employment will help to compensate for slowing growth in construction in 2005.

He predicts that the unemployment rate will average at 4.2 per cent this year, less than half the EU average.

The 2004 numbers were strongly welcomed by Minister for Enterprise, Trade and Employment Micheál Martin, who said they prove the success of the Government's employment policy.

He also said that an emphasis on competitiveness would be maintained throughout the year in 2005.

A breakdown of the CSO data shows that more than 80 per cent of the new jobs created last year were full-time positions.

Economists at Goodbody Stockbrokers were of the opinion that this offered encouraging signs on the "quality" of the new jobs.

Goodbody Stockbrokers also took heart from high levels of job creation in the private sector - this is a trend which the broker's economists believe is indicative of optimism in the wider economy.

The potential labour force as a whole grew by 64,900 to almost two million people last year, with Goodbody estimating that one-third of this growth came from immigration.

"Given the positive near-term outlook, this source will become more important going forward," they said.

The Irish National Organisation of the Unemployed also welcomed the 2004 jobs numbers. However, it expressed a degree of concern over the extent of long-term and youth unemployment.