As an international trading economy, Ireland is heavily dependent on foreign trade and influenced by global markets. Ireland is regularly cited as one of the most open markets in the world and rates highly in globalisation indexes.
The Irish economy experienced a robust recovery in 2021 due in large part to an easing of public health restrictions, a recovery in consumer demand, and strong export activity. GDP and Modified Domestic Demand (MDD) grew by 12.5 per cent and 6.5 per cent, respectively, bringing GDP to over €421 billion. Gross national product (GNP) increased by 6.4% in 2021.
There has been a rapid rebound in the Irish labour market, with employment increasing above pre-pandemic levels, to stand at 2.5 million as of the end of 2021. CSO Labour Force Survey data estimated that 2.5 million people were in work at the end 2021, meaning there are more people in employment now than before the pandemic. At the end of 2021, the Covid-adjusted headline unemployment rate has fallen to below 7 per cent from a peak of around 32 per cent in May last year, and youth unemployment has fallen from a peak of around 70 per cent in May of last year back close to pre pandemic unemployment rate of around 10 per cent.
Central Statistics Office
Central Bank of Ireland
The Expert Group on Future Skills Needs
National Skills Bulletin and other publications
National Skills Bulletin 2021
The National Skills Bulletin 2021 provides an analysis of the Labour Market in Ireland and is available here: https://www.smartchoices.ie/research?id=4
Due to the significant changes to the landscape of the Irish economy over 2020 and 2021 as a result of COVID-19, an analysis of potential shortages at occupational level was not possible. However, an outlook for occupations is provided in light of the impact of COVID-19.
Science & Engineering Occupations
Employment in this occupational group grew strongly over the five-year period with employment continuing to grow in 2020. Growth in employment was particularly driven by high-tech manufacturing, including the pharma segment. Strong export growth in pharmaceutical products in 2020 was primarily driven by COVID-19 products. As such, employment may continue to grow in future years for these occupations, albeit at a more moderate pace than that observed in 2020. Demand for many of these roles continued to be evident during 2020 through the employment permit data, vacancy data and appearing frequently in the Recruitment Agency Survey and the Skills for Growth data as roles which are proving difficult-to-fill. Provision from the third level education system remains strong overall: in 2019 there were over 12,800 science and engineering graduates from the third level education system (2,000 more than in 2015).
However, the skillsets (critical analysis, problem solving, etc.) of scientists and engineers are highly sought after in a range of other occupations (e.g. public administration professionals, teachers). The shift towards a low carbon economy is expected to result in a demand for certain skills amongst scientists (e.g. ecology, environmental, conservation), electrical engineers (e.g. renewable and high voltage) and technicians (e.g. solar/wind), in addition to their existing skills profiles. Future demand for these occupations is anticipated to be strong, with shortages likely to continue. The shortages are expected to be small in number and, for some, will relate to those with experience in niche areas.
ICT occupations had both the highest annual average growth over the five-year period compared to all other occupational groups along with the highest growth since 2019. The growth was driven primarily by those employed as programmers and software developers. With over 3,500 new employment permits issued, these occupations had the second highest share in 2020, after healthcare occupations. Supply from the education/training system has been growing steadily over the last number of years, with almost 7,000 graduates emerging from the third level system in 2019. While some employed in the ICT sector have been in receipt of income support payments since the onset of COVID-19, this does not appear to have impacted those in ICT-specific occupations. As such, the growth seen in recent years is likely to be sustained with potential shortages continuing to occur. With the significant take-up of working from home amongst those in ICT occupations, accessing skills from outside of Ireland without the requirement to be located here, may alleviate some of the issues in sourcing suitably qualified staff.
Business & Financial Occupations
Employment increased in the overall business and financial occupational group in the year since 2019 despite the onset of COVID-19. Although a number of those in the financial sector were in receipt of income support payments in 2020, this does not appear to have impacted on these occupations. While the highest share of employment was concentrated in the financial sector, these skills are also required across a range of other economic sectors. Supply from business and finance related fields of education has continued to grow, with over 24,000 persons gaining third level and/or professional qualifications in 2019.
The financial sector has been identified by the ESRI as a sector which is expected to be significantly impacted by Brexit, although this has yet to be evident from the employment data. The closure of retail banks/branches announced in 2021 (e.g. AIB, BOI, KBC and Ulster Bank) will have an impact on staffing requirements in future years. The future demand for skills will also be impacted by changes in the nature of the tasks required to fulfil these financial roles due to technological change, with financial administrative roles identified in particular as being at high risk of automation.
Despite considerable demand for those employed in healthcare occupations as a result of COVID-19, overall employment growth for this group was below the national average for the period 2015 to 2020. However, demand has been evident, with these occupations accounting for 30% of all new employment permits issued in 2020 (primarily related to nurses and doctors). A recently announced expansion of the occupations in the employment permit system encompasses further therapists and healthcare professional roles. It is also the intention of the HSE to create 16,000 whole time equivalent posts in 2021. Due to Ireland’s ageing demographics demand for health services is expected to continue to grow in future years. Medical practitioners and nurses have a higher share of those employed who are non-Irish nationals.
Social & Care Occupations
Those employed in social and care occupations provide care typically for the very young and the older age cohorts. While COVID-19 had a significant impact on employment in these occupations, the changing demographics in Ireland (both the fall in the number of 0-4-year-olds and the increasing number of those aged 65 years and older in the population) will be the primary driver of employment for these occupations in the coming years. Although the five-year employment growth for this occupation was below the national average, it was particularly strong for other caring services occupations (e.g. healthcare assistants) and social workers, more than offsetting declines in the number of care workers employed. Changes to government funded health services will give rise to increased demand for some of these occupations. In the medium to long term, additional demand for childcare may occur with any increased labour force participation by females, once the effects of COVID-19 on the labour market recede. This may partially offset the decline in demand as a result of changing demographics.
The closure of construction sites as a result of COVID-19 has had a significant impact on employment for construction occupations. Employment growth over the five-year period was below the national average as a direct result of a fall in employment between 2019 and 2020. As restrictions have eased, many employed in the construction sector have returned to work. Also associated with COVID-19, the number of new apprenticeship registrations fell across all construction trades in 2020 and remained far below pre-recession levels. The Climate Action Plan (2019) and Programme for Government (2020) set targets to reduce carbon emissions by 2030 with activities such as the installation of renewable energy heating sources in residential premises (400,000 buildings) as well as the retrofit to B2 BER of housing stock (c500,000 buildings) by 2030. These targets, along with ambitious Government plans to address housing supply, through delivery of an average of 33,000 homes annually over the next decade, are expected to increase demand for construction-related skills across a variety of occupations (operatives, skilled trades/supervisors, engineers) and may lead to future skills and labour shortages. Upskilling and reskilling of those already employed will also be required as the recent EGFSN report on the built environment notes that the nature of the tasks associated with construction occupations is likely to undergo substantial change. In the short-term, the recovery in employment for these occupations will depend on a return to full construction (and other economic) activity, as well as resolving issues with the supply of construction-related materials which have been accentuated as a result of factors such as COVID-19 and Brexit.
Agriculture & Animal Care Occupations
The decline in employment in agriculture and animal care occupations over recent years continued in 2020, driven primarily by a fall in the number of farmers. A recent ESRI paper points to the agricultural sector as being one of the most severely impacted sectors as a result of Brexit. Issues in terms of disincentives to engage in low paid work, availability of supply through inward migration and Government targets in the Climate Action Plan (2019) are also likely to impact employment numbers for these occupations. Demographic effects alone will likely result in a continued decline in employment numbers in the coming years.
Employment fell across all occupations in this group between 2019 and 2020 with the pandemic continuing to cause significant disruption to employment. While overall employment numbers fell sharply in the accommodation and food sector (where the majority were employed) in the year since 2019, this may not be the full extent of the fall. Of those who were classified as employed in this sector, approximately 40% were ‘away from work’ in quarter 4 2020, compared to 11% in quarter 1 2020, indicating that the 2020 figures do not reflect the full impact of COVID-19. This is borne out in the fact that the accommodation and food sector also accounted for the highest share of persons in receipt of income support payments. The increase in average hourly earnings for this sector indicates that the lower paid roles were most impacted as a result of COVID-19. Future demand for these occupations will depend on the speed and extent of the recovery in this sector along with increased international travel.
Transport & Logistics Occupations
Employment growth in these transport occupations was on a par with the national average; the fall in employment for drivers between 2019 and 2020 was offset by an increase in the numbers employed in administrative roles. The transport sector, in which many of these workers were employed, continues to have a relatively high share of persons who are in receipt of income support payments. COVID-19 has also impacted on sectors of employment such as construction and wholesale and retail, and this in turn affects demand for transport-related occupations. Combined with the effects of Brexit, future growth for these occupations will be dependent on the extent of the economic recovery across sectors. In addition, technological changes, automation of processes and the implementation of the Climate Action Plan will result in a need for upskilling/reskilling across all occupations in this field (e.g. enhanced digital skills, green skills for business).
Sales, Marketing & Customer Service Occupations
Employment over the five-year period grew at a rate below the national average, due to a fall in employment that occurred between 2019 and 2020. Almost two-thirds of persons employed in these occupations were in the wholesale and retail sector which has been particularly impacted by COVID-19. This sector continues to account for a high share of persons in receipt of income support payments. A move to online shopping, social distancing requirements and the closure of many retail outlets will impact on the recovery in employment for those occupations particularly exposed to the downturn in the wholesale and retail sector. Demand persists for those outside of the wholesale and retail sector (e.g. industry) who have a skills profile that combines sales skills with specific industry knowledge and technical expertise; as such, cross-sectoral mobility of some skillsets may be limited and difficult to source. The demand for those with both sales and language skills is primarily related to the ICT sector, evidenced in the employment permit data, although the numbers employed in this sector are comparatively small.
Unemployed persons who did not state their previous occupation (e.g., looking for work for the first time, entering employment from inactivity) accounted for 27% of all unemployed persons. In quarter 4 2020, the greatest share of unemployed persons who had stated a previous occupation had previously worked in operative and elementary occupations (22%), managers/professionals (11%) and sales (10%).
Between quarter 4 2019 and quarter 4 2020, the number of unemployed persons increased for all occupations. In terms of absolute numbers, unemployed persons previously working in operative and elementary roles observed the greatest increase (8,400), followed by administrative (6,700) and managerial and professional occupations (4,500). This increase in the numbers unemployed likely relates to the high share of these occupations working in sectors most impacted by COVID-19 such as the accommodation and food and wholesale and retail sectors.
For more information see the National Skills Bulletin 2021: