Vacancies in private sector firms reached their lowest level at the end of last year since July 2003, a new survey from Fás and the ESRI indicates.

Around 6 per cent of firms reported vacancies at the end of 2004, according to the Fás/ESRI employment and vacancies report.

The percentage of construction firms reporting vacancies increased during the fourth quarter of 2004 to 16 per cent, however this was outweighed by the falling percentage of firms reporting vacancies in the industry, retail and services sectors.

The percentage of retail sector firms reporting vacancies fell to its lowest level since July 2004, with only about 1 per cent of retail firms reporting vacancies at the end of the fourth quarter.

Around 15 per cent of firms in the industry sector reported vacancies, down from 20 per cent at the end of the third quarter, while 6 per cent of services firms reported vacancies.

Employers' perceptions of employment levels in private sector firms fell during the fourth quarter, in line with the negative employment expectations recorded at the end of the third quarter. However, the percentage of private sector firms reporting difficulties filling the vacancies they did have rose from 45 per cent in September to 79 per cent in December.

The Irish Small and Medium Enterprise organisation (Isme) said yesterday that there was evidence that the labour market was tightening.

"Across all sectors there is a shortage of unskilled, semi-skilled and skilled labour and hence, as a consequence, the SME sector estimates that it will need 20,000 migrant workers to fill vacancies," said Jim Curran, head of research at Isme.

Both Isme and the Small Firms Association (SFA) have called on the Government to introduce a green card system for skilled migrant workers without delay. A Bill proposing such as system is expected to come before the Dáil shortly.

Overall employment in the private sector is expected to remain stable in the short term, with a more favourable outlook in the services, industry and construction sectors emerging in the final quarter of 2004. However, employers in the retail sector indicated they expected to shed jobs.