DUBLIN — The Central Bank of Ireland has issued a detailed outlook on the state’s economy, noting that while the post-pandemic “exceptional boom” is fading, the underlying economy remains strong. Employment growth is expected to slow to under 2%, with the unemployment rate projected to stabilize around 5%—representing roughly 143,000 people out of work by the end of 2025.
Key Insights from the Report:
- Capacity Constraints: The decline in job postings isn’t due to low demand, but rather because the economy has hit its limits. Firms are struggling with labor shortages, a lack of housing for workers, and infrastructure bottlenecks.
- The “Job Hugging” Trend: Data from LinkedIn highlights a new phenomenon where workers are “hugging” their current roles—staying put and reducing job searches due to a more competitive and cooling market.
- Historical Context: Despite the drop, job vacancies remain higher than they were before the Covid-19 pandemic.
- Real Wage Growth: Crucially, the bank predicts that workers’ purchasing power will continue to improve as inflation stabilizes, even as hiring levels moderate.
Economists describe this phase as a “soft landing” or a return to a sustainable pace of growth after years of operating above potential.
