The Irish economy requires better-trained workers to bridge the gap in competitiveness which has emerged between Ireland and lower-cost countries, according to FÁS.
In its quarterly review of the labour market, FÁS says costs have risen here without a commensurate rise in productivity leading to an erosion of Ireland's competitive position. This slippage could jeopardise Ireland's chances of joining in the global economic upturn which is currently gathering pace, FÁS claims.
The Irish labour market put in a more positive performance during 2003 than had been expected at the start of the year. The numbers at work continued to increase, rising above 1.8 million in the course of the year.
Last year's better than expected outcome was due to the faster than anticipated GNP growth which occurred in labour intensive sectors and to continued growth in public sector employment.
Turning to 2004, FÁS believes employment will grow but at a slower pace than last year, averaging about 0.6 per cent for the year. With the labour force set to grow at a faster rate than employment, the unemployment rate should again increase through the year to just over 5 per cent implying an unemployment rate.
FÁS said that the number of work permits will fall in 2004 because of EU enlargement and the Government's 'open door' policy towards economic migrants from the accession countries from the beginning of May.