Government forecasts employment to surge past pre-pandemic levels in 2022

Country’s unemployment rate will reduce to 6.5% by fourth quarter, says Donohue

The Government is forecasting that there will be a “remarkable re-bound” in the employment levels in the economy with projections of more than 400,000 jobs to be added and the number of people at work to exceed pre-pandemic levels by the end of next year .

The Minister for Finance Paschal Donohoe estimated that by the fourth quarter of next year the country's unemployment rate will have reduced to 6.5 per cent.

This is still a little higher than the pre-pandemic unemployment rate of around 5 per cent.

However Department of Finance figures published in a separate Government report on jobseeker projections and costs on Tuesday as part of the budget documentation showed that last year unemployment levels exceeded 19 per cent.

This report drawn up by the Department of Public Expenditure set out various estimates from the Department of Finance, the Central Bank and the ESRI suggesting that overall the number of people in work could reach between just over 2.3 and 2.4 million next year.

Mr Donohoe said the jobs outlook had improved significantly in recent months .

He said the number of people receiving the pandemic unemployment payment had fallen to below 100,000 for the first time since , down from over 500,000 in early February.

“The sharp fall in pandemic unemployment payment recipients and improving labour market conditions have prompted the current Covid-adjusted unemployment rate to fall below 10 per cent, the lowest rate since the onset of the pandemic. By year end the unemployment rate is forecast to be just over nine per cent. Employment is forecast to grow by just under eight per cent or around 150,000 jobs this year.”

“Next year, the unemployment rate is expected to fall to around 6.5 per cent by the fourth quarter, still higher than the pre-pandemic rate of around 5 per cent. Employment is expected to grow by just over 13 per cent or 275,000 jobs in 2022”, Mr Donohoe said.

He said overall more than 400,000 jobs would be added to the economy between this year and next, and employment was expected to reach and exceed its pre-pandemic level during the course of 2022.

“This performance, by any measure, represents a remarkable rebound in our jobs outlook.”

‘No cliff-edge’

Tánaiste and Minister for Enterprise and Employment Leo Varadkar said an extension until April 2022 of the Employment Wage Subsidy Scheme (EWSS) – which is aimed at assisting businesses to keep on their staff – was the largest single item in the budget at a potential cost of up to €1.4 billion.

“It is being done at a time when many Governments are closing down similar schemes. We are doing this because we want to give every business a fighting chance to survive the pandemic and hold on to as many of their staff as they can. It’s about protecting jobs and businesses.”

“This is a budget which recognises many businesses are still struggling. There will be no cliff-edge for those that still need financial support from the State. We are extending the EWSS and a targeted rates waiver to help them get back on their feet. We’re making sure low-cost Government- backed loans will remain available.”

"We are also looking to the future and helping those that are in a position to grow. The expansion of the Employment and Investment Incentive Scheme [EIIS], the extension of the Small Start-Up Companies Relief, the new Digital Games Tax Credit, a new €90 million Innovation Equity Fund as well as increased resources for the IDA and Enterprise Ireland will ensure this.