Minister for Finance statement on the Employment Rate given current Global Uncertainty

The Minister states:

Despite several economic shocks in recent years, the labour market in Ireland has proven resilient.

The latest data bear this out. Over the last year alone, total employment has increased by 90,000, with the total number in work now exceeding 2.8 million, the highest ever. The unemployment rate stands at just 4.0 per cent, while female participation is at a record high.

My Department set out its updated assessment of the economic outlook earlier this month in the Annual Progress Report; I would stress that this assessment should be seen more as a set of scenarios rather than a strict forecast.

The baseline projections set out in the Annual Progress Report were produced during March on the assumption that no transatlantic tariffs would be introduced and were endorsed by the Irish Fiscal Advisory Council.

On this basis, employment is projected to increase by 2.0 per cent this year, and 1.5 per cent next year. This is a downward revision relative to the autumn forecasts reflecting, in part, the significant increase in uncertainty and more challenging global economic outlook.

My Department also produced an alternative scenario which attempts to incorporate the potential impacts of tariffs that were in place at end-April. In this scenario, while employment is expected to continue to expand there could be around 25,000 fewer jobs created by the end of next year, relative to the baseline 'no tariff' scenario.

From a policy perspective, the changing global landscape means that we have to double-down on competitiveness.

In this vein, last month, the Government announced the development of a new whole-of-Government Action Plan on Competitiveness and Productivity, which will identify concrete, actionable reforms to continue to boost Ireland's competitiveness position.

Indeed, we need a laser-like focus on those areas that we can exert influence - like boosting our energy and water infrastructure, our transport and housing stock, simplifying our regulatory environment and ensuring labour costs increase in line with productivity.

We will also continue to invest in human capital - in education, skills and training - to boost productivity and address skills mismatches in the economy.

From a fiscal perspective we need to calibrate budgetary policies that recognise the more challenging external backdrop. In particular, the tax base must be broad and expenditure increases must be sustainable. Let us not forget that we are facing the challenges ahead from a position of strength because of the work we have done in rebuilding our fiscal buffers.

This is the best way to ensure the resilience of the labour market as we navigate the more challenging global economic backdrop.