Dublin's labour market is now as tight as central London's, according to a study by the Central Bank and recruitment website Indeed.
The research, presented at a Dublin Economics Workshop event in Wexford at the weekend, analysed more than 50,000 online job postings and searches on indeed.ie to assess the relative tightness of the jobs market in the Republic, effectively the ratio of vacancies to unemployed people.
It found there were roughly two unemployed people for every job vacancy in Dublin, which put the Irish capital on a par with central London, one of the most competitive labour markets in the world.
However, Central Bank economist Reamonn Lydon cautions that about a fifth of workers in Dublin come in from outside the city, meaning the headline measure may overstate the tightness of the market.
Nonetheless, similar ratios were found in Cork and Galway, and a tightening of the labour market was also detected in counties such as Sligo, where demand was being driven by medtech and biotech companies.
Several multinationals in the State have recently stated that finding the right staff was now the main obstacle to expansion.
Mr Lydon said the high-demand areas were finance; skilled construction, which includes architects, surveyors and civil engineers; information technology; and health.
Overseas interest
He said the figures suggested that in certain areas such as IT, half the jobs advertised were being clicked on by people from outside Ireland. This confirmed separate Central Statistics Office data showing half of all new hires in IT were people from abroad, either Irish nationals returning or foreign nationals coming in, Mr Lydon said.
He said job searches on the Indeed website from EU people picked up “very sharply” in the wake of the UK’s Brexit referendum.
“So there may be an extent to which we’re benefiting from people not wanting to go to the UK but still wanting to come to Ireland to work,” he said.
Housing was “the elephant in the room”, Mr Lydon said. In other words, how was the State going to house incoming workers given the current shortages?
In a tighter labour market, bargaining power typically shifts towards workers and that might explain the recent pick-up in wages, he said.
Wage growth in the Irish economy is now accelerating at its fastest pace in a decade, according to recent CSO data, with average weekly earnings put at €771.12 in the second quarter of 2019, up from €745.09 a year earlier.
This represents an annual growth rate of 3.5 per cent, compared with an average of 3.3 per cent last year, 1.9 per cent in 2017 and 0.2 per cent in 2014.
The Economics and Social Research Institute suggested that pick-up may be even sharper, noting that average hourly earnings grew by over 4 per cent last year and were expected to grow by 4.5 per cent this year.
