Job creation is expected to moderate this year and the services sector will be where most new jobs will be available, according to the latest FÁS quarterly labour market commentary.
The report says two contrasting trends seem to be emerging as demand for service workers has remained strong while demand for construction workers has weakened.
The employment agency expects employment to grow by 60,000 jobs this year - or 3 per cent - with the average unemployment rate remaining just below 5 per cent next year. However, employment growth is forecast to moderate significantly in 2008 to around 1 per cent, with the creation of 23,000 jobs.
FÁS believes that immigration from Central Europe has peaked and that coupled with the slowing construction sector net migration from these countries will halve from 60,000 this year to 30,000 in 2008 as migrants adjust to the looser labour market.
More than 320,000 PPS numbers were issued to people from the ten new member states numbersin the three years after the accession, with 4 out of 5 migrants coming from Poland in the third year.
According to the FÁS report the majority of the new jobs growth for 2007 and 2008 will come from the services sector with more than 70,000 jobs expected from this sector.
Wages in most sectors has just about kept pace with inflation with the result that in real terms most workers are seeing no real increase in wages. More rapid earnings growth has been experienced by the lowest paid as a result of two minimum wage increases.
These have given Ireland the highest minimum wage for full-time employees in the EU after Luxembourg. Only 3 per cent of full-time workers are employed at the minimum wage.
Brian McCormick FÁS economist said: "The labour market has begun to transition from a period of high employment growth to a more moderate rate of job creation. While job losses in the construction sector seem inevitable as housing output declines, an increasing emphasis on housing quality will soften the negative impact on employment."