Ibec says the biggest barrier to growth in the future will be labour shortages.
In its latest Quarterly Economic Outlook, Ibec expects the economy to grow this year by 13% and by 6% next year.
However, it cautions that the biggest barrier to growth in the future will be labour shortages.
Ibec describes the labour market as being at its tightest since the early 2000s with 2.4 million people at work – the highest in the history of the State.
It says population growth would have added around 20,000 to the labour force as recently as 2016 but estimates the contribution this year was only around 13,000.
It expects that between 2020 and 2025, the population will contribute an average of 10,000 a year to the workforce. This will fall to 7,000 a year from 2025 due to the ageing of the population.
To ensure our economy can continue to grow, now more than ever we need to tap into every potential worker.
There are four key sources of employees:
- Population growth, as indicated by the current Ibec report. The average number of children born to all women aged 15 years or over has decreased marginally over the five years, from 1.83 children per woman in 2011 to 82 in 2016. The rate has decreased slightly for nearly all the ages. (CSO)
- Immigration, The Central Statistics Office publishes the annual Population and Migration Estimates for April 2021. … These combined flows gave positive net migration, (more people arrived than left), of 11,200in the year to April 2021, compared with 28,900 in the previous year. (CSO, 31 August 2021)
- Labour force participation – The participation rate for all persons aged 15 years and over stood at 0% inQ1 2021 down from 62.2% a year earlier. In Q1 2021, the participation rate for males was 65.9% compared to 54.3% for females. (CSO). Our nearest neighbours, UK, had an LFP of 79.90% in Jan 2020
- Older workers. – a subset of our LFP. Ireland has capacity in the over 50’s cohort, particularly female, in terms of unemployed and underemployed. By 2031 it is forecast that at least 32 per cent of the labour force in Ireland will be aged over 50 years, up from 26 per cent in 2016. (Ageing Report Sept 2019 ESRI).
The implication is that the only growth area in our Labour Force is the over 50’s.
The Grey Matters Network focuses on the older workers in our workforce. Our panel consists of hundreds of highly experienced professionals from almost every sector and functional area.