We live in interesting times. From new wars to old inequalities, inflation to energy costs, in 2023 the Irish economy faces many challenges. And these challenges have an inevitable impact on every corner of our daily lives, from the price of food and fuel – to the Irish jobs market.
At CareerWise, our concern is maximising your career potential. Whether you are just starting, or you’re looking for a new job direction, our friendly team of recruitment experts can help.
As living pressures rise and the economic outlook fluctuates, the year ahead seems uncertain for the employment sector. Here is our guide to understanding the potential impact of the wider economic situation on the Irish jobs market.
The world economic outlook is troubled. From rising energy costs to reduced consumer spending, inflationary pressures are rising and most major markets are predicted to struggle. The International Monetary Fund said it expected global output to grow by 2.7% in 2023, down from the 3.2% expansion in 2022 and growth of 6% in 2021.
The IMF has predicted Eurozone growth of 0.5% next year, which is close to stagnation. Germany’s output is expected to contract by 0.3%.
Meanwhile, it expects British GDP to grow 0.3% in 2023, which is very close to negative territory, while it sees the US economy growing by 1%.
A recession is technically defined as two consecutive quarters where the economy contracts and economists are seeing the beginning of this kind of uncertainty hitting many countries in the coming year.
Projected Irish growth prospects are faring well when compared with other European economies. According to the European Commission, Ireland’s real GDP growth for 2023 is revised upwards to 4.9%, with 4.1% growth pencilled in for 2024.
The Irish economy is being helped by the strong Irish jobs market. The Commission report states: “The Irish labour market continues to perform very well, with the unemployment rate at 4.3% in December. Despite news on some big tech companies reducing their staff worldwide, [there is] yet no visible negative impact in Ireland where the multinational sector has increased employment in 2022 by 9%.”
Along with the rest of the world, Ireland’s economy is still recovering from the pandemic. Mass job losses meant many more people relied on government help to get by, putting public finances under huge strain. Interventions were required in the labour market, where businesses forced to pause trading because of the COVID restrictions required support, and households struggled to get by, dependent on employment wage subsidy scheme payments.
Following the pandemic, the war in Ukraine saw energy prices spiral. Our economies are intricately linked to fossil fuels, and the rising price of oil affects the cost of all areas of living. From transport to food, significant price increases began hitting households last year.
Firms still reeling from pandemic restrictions found the situation rapidly shifting once again, as cost of living concerns affected spending. Key sectors such as hospitality and tourism have been particularly badly hit by both the pandemic and the war.
High energy costs have contributed to inflation, leading to rising costs in everything from household bills to food. This has put pressure on consumer spending, meaning real incomes are shrinking and consumers purchasing power is reduced. These inflationary pressures have also led to interest rate increases, which herald tougher times for borrowers and mortgage holders.
While it seems the Irish economy will avoid a recession, the scale of the challenge facing the Irish economy should not be underestimated. The uncertainty of recent years has had an ongoing impact, and in no area is this more apparent than in the labour market.
In a recession, or times of economic uncertainty, employers are much less likely to invest in staff, expand their teams, or spend money on the recruitment process. They will be focusing on cutting costs, increasing the resilience of their business, and getting to the other side of the tough patch.
This has an immediate effect on those seeking employment. As good roles become less available, competition increases, and unemployment often increases if industries are forced to lay off staff. This can make for a tricky environment for job hunters to navigate.
If companies are uncertain about the economy, they may be less likely to hire new employees.
If the economy slows down, companies may need to cut costs, which could result in job losses. While the labour market saw something of a boom in the tech sector in recent years, the global slowdown is already contributing to job losses in big tech businesses – Meta, Twitter, Salesforce, Indeed, and Google have all announced staff cuts.
In a tough economic climate, companies may be less likely to offer generous pay increases or bonuses.
With fewer jobs available, there may be more competition among job seekers.
If you are searching for a new job, it’s important to take the wider economic outlook into account. While the European Central Bank and exchequer receipts might seem to bear little relation to your present-day wish to develop skills and progress your career, they will have a significant impact.
Political and economic influences can make all the difference when it comes to a successful job search. Modified domestic demand in a certain sector could mean there simply aren’t the roles available and you may have to adjust your expectations. Uncertainty may affect businesses’ hiring strategies, with sustainability concerns leading to greater caution – and much greater difficulty for a candidate hoping to access that area.
However, there is positive news. While uncertainty and high inflation have created causes for concern, the Irish economy nonetheless looks set to perform well. Irish Minister for Enterprise, Trade and Employment, Simon Coveney, has stated that although businesses face challenges, Ireland is in a good position to weather the storm.
“I think we will see disruption . . . that’s not a surprise, a lot of countries are going into recession this year . . . we’re not and we’re going work hard to make sure we don’t.”
With the job market affected by everything from climate change to high inflation, there’s never been a better time to get help in steering your career. At CareerWise, we are experts in all things recruitment. From understanding the impact of inflationary pressures on your chosen career role to helping you focus on the sustainability of your skills in an ever-shifting market, we can support you on your journey.
If you’re looking for a job in the Engineering, Supply Chain, Science/Pharma, IT and Accounting industries in Ireland, call CareerWise today. We look forward to working with you. Contact us online now or call us at +353 (0) 21 206 1900 to arrange a consultation.
Joe Robbins is co-founder of CareerWise Recruitment. A graduate of the University of Limerick (Degree in Business Studies, 1985), Joe worked in the UK for five years where he specialised in materials management, production management and plant management for a number of companies.
He returned to Ireland in 1992 to become Operations Manager for a Cork-based start-up, FMC Automotive Division which was subsequently taken over by Snap-on Equipment. Joe managed the business re-location of this company to Shannon in 1997 before setting up CareerWise Recruitment in 1999.
He is a committee member of the Chartered Institute of Personnel and Development (CIPD) Mid-West region, and a former Director and Vice President of the Shannon Chamber of Commerce. Joe is former Chairperson of the Sixmilebridge Camogie Club and current Chairperson of the Clare County Camogie Board.
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CareerWise Recruitment. EastGate Village, EastGate, Little Island, Cork.
Phone: +353 (0) 21 206 1900
Email: info@careerwise.ie
