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The shocking news that we are running short of workers has come to light as a new report forecasts our economy will grow by 4.7% this year and 3.9% next year.(Pic: Shutterstock)<\/p>\nIreland will need an extra 90,000 foreign workers to move here over the next two years to prevent a labour shortage which could lead to spiralling wages and inflation.<\/p>\n
The shocking news that we are running short of workers has come to light as a new report forecasts our economy will grow by 4.7% this year and 3.9% next year.(Pic: Shutterstock)<\/p>\n
These figures are based on booming tax receipts and overall consumer and business sentiment, according to the Economic and Social Research Institute.<\/p>\n The influential think tank predicts that the unemployment rate will drop to just 5% next year, down from its current 5.8%. ESRI research professor, Kieran McQuinn, said the institute is predicting that Ireland will need to find 90,000 extra workers over the next two years.<\/p>\n \u2018That\u2019s basically what we would need to keep the labour force at the level required to keep unemployment at that rate,\u2019 he told\u00a0Extra.ie<\/strong><\/em>.<\/p>\n \u2018That\u2019s quite high by historical standards, but in 2007 we attracted somewhere in the region of 150,000 people, and in 2008 we attracted just under 114,000.<\/p>\n \u2018So we have attracted large numbers into the economy before.<\/p>\n \u2018That was in circumstances where other \u2013 particularly eastern European \u2013 economies, hadn\u2019t grown as strongly.\u2019 Professor McQuinn also pointed out that ten years ago Ireland did not have its current accommodation problems and high rents.<\/p>\n \u2018We\u2019re getting to the point where we need to attract people from abroad, otherwise we\u2019re going to have wage inflation and it\u2019s not quite clear where those people will come from,\u2019 he said.<\/p>\n The jobs that are needed are a mixture of high-skilled and well-paid positions, as well as lower-skilled jobs \u2013 without which the country would suffer a skills shortage.<\/p>\n \u2018Where the jobs are coming in the economy\u2026 it\u2019s very broadly-based and across different sectors,\u2019 he said.<\/p>\n \u2018There\u2019s also a lot of construction activity over the coming period, and that\u2019s going to require people of different skill sets,\u2019 he added.<\/p>\n The forecast comes just as internet giant Amazon announced yesterday that 1,000 new jobs are to be created in Dublin.<\/p>\n The ESRI \u2013 which released its summer Economic Commentary last night \u2013 also warns against a tax cuts giveaway which it said would be like \u2018pouring petrol on the fire\u2019 in an already strong economy.<\/p>\n Prof. McQuinn said: \u2018With the [national] development plan there\u2019s a lot of money going to be spent over the coming years.<\/p>\n \u2018It\u2019s an economy that\u2019s already growing very strongly, so putting more money into the economy through taxation policy would run the risk of it over-heating. Pouring petrol on the fire is the analogy that is often used.\u2019 He said one possible way of boosting the workforce would be to attract back Irish people who left in 2007\/8 after the crash.<\/p>\n \u2018It would be one source, but I think there\u2019s only a limited supply of those kinds of people looking to come back. But returning emigrants would be one source of that supply \u2013 certainly it would help.\u2019 Prof. McQuinn sees Ireland attracting foreign workers from across the EU.<\/p>\n He said the economy had to be sustained and invested in so that \u2018we don\u2019t get back into that awful boom-bust cycle that\u2019s, unfortunately, characterised Irish economic activity over the past 25-30 years\u2019.<\/p>\n According to recruitment specialists Hays Ireland, more than three-quarters of Irish companies experienced a \u2018moderate\u2019 or \u2018extreme\u2019 skills shortage last year \u2013 the majority in IT, life sciences and construction. Some of these shortages are being met through migration and investment in training and education, the ESRI says.<\/p>\n \u2018While Ireland does not exhibit human capital deficits, skill shortages in fast-growing sectors are starting to emerge and challenges to the employment of low-skilled individuals persist,\u2019 the ESRI report says.<\/p>\n