LFS may overstate Irish employment growth slowdown

This morning’s CSO Labour Force Survey data (LFS), showed that employment growth returned in Q2, following an unexpected quarterly fall in Q1, with employment up nearly 20,000 (+0.7%), from Q1. Annual employment growth was quite soft, rising by just 0.8%, with falls in annual employment in five of the fourteen sectors. However, there may still be some sampling errors at work in this data as it is at odds with other economic data. The CSO’s payrolls release shows that employment increased by 1.8% in the year to May, while trends in some individual sectors (for example, professional, scientific and technical) within this data, which is based on Revenue Commissioners data, are at odds with similar sectors in the LFS, which is survey based. Buoyant tax returns data in the year to July also point to stronger employment growth than indicated in the LFS. We do think employment growth has slowed from the 2%+ rates seen in the past number of years, but we think this data is overplaying the slowdown.

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Bank of Ireland Economics Weekly August 20th 2026