Irish employment growth accelerates to 2% in Q4 2025
This morning’s Irish Labour Force Survey (LFS) revealed that employment rose by 0.5% in Q4 2025, the annual pace of job creation accelerating to 2% (up from 1.1% in Q3). The unemployment rate was revised down again, to 4.6% in Q4 2025, from the 5% initially estimated and declining from 4.9% in Q3 2025. These out-turns bear out our view the labour market data during the summer was temporarily weak, due to a range of seasonal factors the CSO struggles to adjust for (e.g. youth unemployment), but would bounce-back in Q4.
Construction (9%), industry (6.6%) and the public sector led jobs growth in 2025, albeit offset by small declines in consumer facing sectors such as wholesale/retail (-0.9%) and hotels/restaurants (-0.7%). In summary, the Q4 2025 out-turn gives us confidence in our view that employment growth is gradually slowing, from exceptional rates above 3%, towards our forecast for 1.5% growth in 2026 and 2027 – a robust expansion but more sustainable pace.
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