- Optimism Meets Infrastructure Reality
While the recent announcement of US–China tariff reductions has boosted global markets and sparked renewed business optimism, the Irish employment market remains at the mercy of structural domestic constraints, most notably in housing delivery. Insights from Ibec, HLB, and leading media reporting reveal a market caught between external tailwinds and internal choke points.
🟢 What’s Working: External Stability and Domestic Strengths
1. Global Trade Optimism Buoys Irish Export Sectors
- The 90-day US–China tariff truce signals a potential cooling of trade tensions, benefiting open, export-driven economies like Ireland.
- Ibec projects Irish exports to grow 4.1% in 2025 following a bounce-back of nearly 9% in 2024.
- A strong US dollar, driven by rising US interest rates and tariffs, may also enhance profit margins on euro-invoiced Irish exports, making Ireland an even more attractive base for multinational exporters.
2. Labour Market Remains Tight, But Active
- Unemployment remains low at 4.1%, and over 2.8 million are expected to be in work by end of 2025.
- Sectors such as ICT, health, construction, and scientific services continue to be key contributors to job growth—particularly roles tied to innovation, digital transformation, and infrastructure.
- Foreign-born workers are playing a critical role, with 30% of the workforce born outside Ireland and high levels of tertiary education amongst them.
3. Business Leaders Focused on Long-Term Profitability
- Despite economic concerns, 85% of global business leaders remain confident about growth in 2025.
- However, instead of hiring sprees, employers are doubling down on operational efficiency, internal restructuring, and automation—especially in SMEs and construction-linked businesses where skills gaps and digital fatigue are intensifying.
🔴 What’s Blocking Growth: The Housing Crisis and Regulatory Paralysis
1. Housing Market Bottlenecks Undermining Expansion
- The failure to secure a deal on affordable housing at the Glass Bottle site in Ringsend—where proposed prices for “affordable” units approached €495,000—exposes just how broken the current cost model is.
- Investment funds like Elkstone are now openly warning that regulatory uncertainty, particularly rent controls, is freezing private capital intended for housing development.
- Ibec has long flagged this as a critical risk: housing, electricity grid, and planning delays are now the biggest barriers to economic growth, not external market conditions.
2. Retrofitting is Growing—But Can’t Replace New Builds
- The one area of momentum in housing is retrofitting, driven by SEAI grants and green lending. Geowox data shows A- and B-rated homes sell for 30.8% more, creating a financial incentive to upgrade.
- This shift is spawning opportunities for skilled trades, energy assessors, and building contractors, particularly in rural and suburban areas.
- But this is not a replacement for large-scale housing development—it’s job-protective, not job-generative on the same scale.
⚖️ Labour Market Outlook: Diverging Trends by Sector
Sector | Outlook | Drivers |
Construction | ⚠️ Mixed | Retrofitting up, but large-scale housing down due to cost and planning constraints |
ICT & Digital | ✅ Strong | Innovation and AI adoption continue to fuel demand for high-skilled roles |
Retail & Admin Support | ❌ Weakening | Ibec notes a 3.6% annual decline in admin/support roles |
Professional Services | ✅ Growing | Scientific, consultancy, and tech-linked services seeing sustained expansion |
Public Sector | ⚠️ Under Pressure | Employment growing, but infrastructure capacity is lagging |
🧩 The Bigger Picture: Hiring Is Not the Problem—Housing Is
- Employers want to grow, but they face an environment that cannot support the required workforce. Talent attraction and retention are being undercut by:
- Unaffordable housing for key workers.
- Unpredictable planning processes.
- Regulatory frameworks (e.g. rent pressure zones) that create disincentives to invest.
- Even high-profit businesses (as identified in the HLB survey) are choosing to focus on internal productivity, digital transformation, and culture over external expansion because they can’t guarantee the necessary physical infrastructure will follow.
✅ Summary: A Two-Speed Economy
- Externally, Ireland is performing well: it is a safe, open, and productive economy, buoyed by trade growth and multinational presence.
- Internally, critical infrastructure—especially housing—is failing to keep pace. This bottleneck is distorting job growth, delaying investments, and shifting employer focus away from expansion to survival and optimisation.
- The real threat to the employment market is not a lack of demand or global instability. It’s the capacity constraints of the domestic system itself.