Employment growth in the Republic is likely to halve this year. This is in line with a revised downward estimate in the rate of economic growth from 7.25 per cent to 6.25 per cent. However there will continue to be "tightness" in the labour market and a requirement for at least 10,000 immigrant workers.

According to the latest FAS "Review of Market Trends and Outlook", total employment is expected to grow by 51,000 or 3.2 per cent this year, compared with 98,000 or 6.9 per cent in 1999.

"Economic growth, as measured by GNP, is forecast to increase in real terms by 6.25 per cent in 2000. This is down slightly on the latest 1999 growth estimate of 7.25 per cent but is over twice the rate of growth forecast for the euro-11 countries," it says.

"The main factor underlying this lower growth projection is the expectation that increases in private consumption, exports and investment will not be as rapid in 2000 as they were in 1999.

"Given this, as well as the reducing availability of labour, employment is not expected to increase as rapidly in 2000 as it did in 1999. In 2000 total employment is forecast to increase by at least 3.2 per cent, or by 51,000 or more.

"The labour force is expected to increase by 41,000, or 2.4 per cent in 2000. The forecast of continued growth in the labour force assumes that female labour force participation rates and net immigration will continue at recent high historical levels.

Unemployment is forecast to continue to decline in 2000 but not as rapidly as it did in 1999."

The report qualifies its forecast by pointing out that growth in 1999, as in previous years, has exceeded expectations. Latest estimates put growth at 7.25 per cent, compared with original forecasts of 5.5 per cent to 6 per cent.

"Personal consumption continued to grow very strongly. Exports and investment activity, although not growing at the exceptional rate of 1998, also made a strong positive contribution."

It says however that some aspects in labour force growth will change, regardless of growth figures. For instance it states that the exceptional high rate of women joining the workforce is likely to taper off as we approach average EU female participation rates.

Similarly the reservoir of long-term unemployed and young unemployed is also falling.

The number of long-term unemployed fell by 15,700, or almost one-third last year, leaving just 36,000 in this category compared with 128,000 just six years ago. Youth unemployment fell from 31,900 to 27,700 last year.

Last year also saw the first increase in agricultural employment in many years, with 4,000 extra people working in the sector. This is an increase of 6.9 per cent.

The rapid natural increase in the labour force will begin to decline in the coming decade. If inward migration continues at around 12,500 per year, this implies the reduction in unemployment rates will also ease off. As a result unemployment is likely to level off at around 4 per cent by the end of the decade.