Chris Dooley,
Industry and Employment Correspondent
Unemployment will continue to rise this year, with further job losses in low-skilled sectors "inevitable", FÁS has warned.
In its annual end-of-year review, the State employment and training agency also predicts a sharp fall in the level of wage increases, but says workers will still have to become more productive if the economy is to remain competitive.
The review forecasts that job numbers will increase in high-skilled industries, such as the pharmaceuticals sector, if economic conditions continue to improve.
An improved job-filling service and a range of training initiatives are also promised by FÁS, which is currently holding a major careers and skills fair in Dublin. It concludes today.
One of the review's main findings is that employment growth will continue to slow down this year, despite the pick-up in the economy. The average number employed over the year is expected to rise by just 16,000 in 2004, compared to an increase of 24,000 last year and a peak of 90,000 in 1999.
Last year's rise in job numbers occurred mainly in the public sector, where employment increased by 20,000. There was also a significant rise in part-time jobs, but employment in manufacturing fell by 10,000.
Unemployment is projected to rise from its 2003 average of 4.8 per cent to 5 per cent this year, which FÁS describes as a "modest increase" and still well below the EU average of 8 per cent.
Further structural unemployment seems inevitable, the review says, as low-skill jobs such as plant and machine operatives, which fell by 15 per cent last year, continue to move east.
"Employment in high-skilled industries should, however, increase in response to any cyclical upturn. In particular, there is strong potential for growth in the pharmaceuticals sector, especially in research and development, given the tax allowances targeted at this area in the recent Budget."
Addressing wage levels, the review says earnings growth is expected to continue to moderate.
It cites an ESRI forecast that weekly earnings are set to rise by just 3.6 per cent this year, compared to 5.5 per cent last year and 9 per cent in 2002.
Despite this moderation, wage rises are still likely to be higher this year than in the Republic's main trading partners, with the exception of the UK.
"These above-average wage increases, combined with the continued appreciation of the euro vis-à-vis the dollar, make improvements in productivity imperative if we are to remain competitive internationally."
Employers notified FÁS of 107,500 vacancies in 2003, a small increase on the previous year. To improve its job-filling service, the agency is to introduce a new, integrated system, FÁS Jobs Ireland, with a single access telephone number - 1800 611 116 - for employers and job-seekers. Job-matching using the Internet will also be made more user-friendly, it has promised.
A wide range of training courses and initiatives are also to be implemented this year in co-operation with Enterprise Ireland, IBEC and other industry bodies, the review says. These will include steps to increase the amount of on-the-job training received by lower-skilled workers. FÁS has discovered that a third-level graduate is four times more likely to receive training at work than someone with a Junior Certificate only.