Labour shortage threatens to cripple the economic boom

From a position a few years ago as one of Europe's unemployment black spots, the economy is now facing a shortage of people to…

From a position a few years ago as one of Europe's unemployment black spots, the economy is now facing a shortage of people to fill available jobs. The unemployment rate has fallen to 6.4 per cent, its lowest since records began, according to new figures from the Central Statistics Office, while there is "increasing evidence" of shortages in the supply of labour.

The quarterly national household survey, carried out by the Central Statistics Office, found just over 100,000 people, or 6.4 per cent of the labour force, were out of work at the end of 1998, compared with 10.4 per cent a year earlier. The figures are much lower than the monthly live register - which has just fallen below 200,000 - but are seen as a more accurate measure of unemployment.

Meanwhile, the numbers in work topped 1.5 million for the first time, peaking at 1.56 million in the summer before slipping to 1.55 million towards the end of the year.

The services sector continued to provide most of the increase in employment, although construction also showed good growth. There was little change in employment levels in public administration, health and education.

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However, after years of grappling with unemployment, the Irish economy faces a new and critical problem as the figures also contained increasing evidence of labour supply shortages.

The CSO pointed out that the potential supply of people to fill jobs had fallen sharply over the last five years, while employment was increasing at a rate of 4-5 per cent each year. The growth in the numbers of young people coming onto the jobs market is now enough to fill only one of every two jobs created and there are fewer people with the skills to take up the rest.

The Government welcomed the employment figures.

"We created 72,000 new jobs last year and for me one of the most encouraging aspects of the survey is the decrease in long-term unemployment, which now stands at just over three per cent," the Government chief whip, Mr Seamus Brennan, said.

The Irish National Organisation of the Unemployed (INOU) warned that the unemployment problem was by no means solved. "There are still 106,000 people in Ireland who want work and are actively seeking it," the INOU said.