Ireland’s Job Market: Navigating Uncertainty and the Rise of AI
For years, Ireland’s employment figures defied global headwinds. From the tail end of the Covid-19 pandemic through much of 2024, the unemployment rate remained remarkably stable, hovering between 4% and 4.5% – a level often considered full employment. This resilience, touted by the government, seemed to withstand the shocks of the Ukraine war, soaring inflation, and shifting global trade dynamics. However, that stability is now showing cracks. A recent uptick to 5% overall, with youth unemployment climbing to 14%, is fueling anxieties about the future.
The Shifting Sands of Employment Growth
While Enterprise Ireland reports continued job growth among its client companies – over 12,000 new positions in the past year – the pace is slowing. The surge of over 20,000 jobs in 2021, a post-pandemic bounce, hasn’t been replicated. Experts like Kevin Sherry of Enterprise Ireland acknowledge a cautious approach to hiring, influenced by factors like US tariffs and ongoing geopolitical uncertainty. The key takeaway isn’t necessarily job losses, but a deceleration in the rate of new job creation.
“We don’t want to see big peaks and troughs… Importantly, the job losses number has not increased.” – Kevin Sherry, Enterprise Ireland Executive Director
Amazon and the AI Factor: A White-Collar Wake-Up Call
Recent announcements, like Amazon’s global cuts impacting potentially 300 Irish roles, are amplifying these concerns. These aren’t blue-collar layoffs; they’re impacting white-collar workers – professionals with established careers facing a suddenly more competitive landscape. Amazon, like many tech giants, is streamlining operations and leveraging advancements in artificial intelligence to reduce headcount. This trend signals a broader shift in the types of skills in demand.
The Multinational Slowdown and Sectoral Divergence
Economists at Bank of Ireland and the Economic and Social Research Institute (ESRI) predict a further cooling of employment growth, forecasting a rate of just 1.5% for 2026. Conall Mac Coille, chief economist at Bank of Ireland, believes the era of rapid expansion in the multinational sector is over. Companies like Google and Meta, which aggressively hired during the pandemic, are now recalibrating their workforces.
However, the picture isn’t uniformly bleak. Manufacturing, construction, and the public sector are showing resilience. Increased government spending on wages is bolstering the public sector, while manufacturing benefits from ongoing demand. Consumer-facing businesses, particularly restaurants, are struggling with rising energy costs and food price inflation, contributing to the rise in youth unemployment and a decline in part-time work.
Skills Gaps and the Future of Work
A persistent skills gap remains a significant challenge. Christopher Paye of StepStone Group Ireland highlights that nearly 70% of employers struggle to find talent equipped to “future-proof” their operations. This isn’t just about technical skills like AI and data analysis; employers are increasingly prioritizing “soft skills” – leadership, people management, and adaptability.
The rise of AI is reshaping career trajectories. Repetitive tasks are being automated, creating a need for graduates to be more flexible and open to new roles. Universities are responding by collaborating with industry to ensure their curricula align with evolving employer needs. Demand is growing in areas like data compliance, reflecting the increasing importance of data privacy and security.
“Our message to graduates is to be more open-minded… There are fewer visible roles, but interesting opportunities exist for those who adapt.” – Trayc Keevans, Global FDI Director, Morgan McKinley
Diversification of Investment and Emerging Opportunities
While the US remains a crucial source of foreign direct investment (FDI), Ireland is seeing increased interest from other regions, particularly China. Chinese companies are exploring opportunities in technology, pharmaceuticals, and other sectors, often through mergers and acquisitions. This diversification is a positive sign, reducing Ireland’s reliance on a single market.
Navigating the New Normal: A Focus on Control
The overall outlook suggests a period of slower, more sustainable growth. The key for Irish businesses, as Kevin Sherry of Enterprise Ireland advises, is to focus on “controlling the controllables” – managing internal operations effectively and adapting to the external environment.
FAQ: Ireland’s Job Market in 2026
- What is the current unemployment rate in Ireland? Approximately 5%, with youth unemployment at 14%.
- Is Ireland heading for a recession? While growth is slowing, economists don’t currently predict an immediate recession.
- What skills are most in demand? AI, data analysis, data compliance, leadership, and people management.
- How is AI impacting the job market? AI is automating repetitive tasks, leading to a shift in the types of skills employers seek.
- What sectors are performing well? Manufacturing, construction, and the public sector.
Pro Tip: Invest in upskilling and reskilling programs to stay ahead of the curve. Focus on developing both technical and soft skills to enhance your employability.
Did you know? Ireland’s IDA attracted a record level of foreign investment in 2024, despite global economic challenges.
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