Dan O'Brien: Hospitality, white collars and white coats drive jobs growth
The surge in job creation in the second quarter of this year, which saw net employment grow by 20,000 in just three months, points to an economy that is growing rapidly.
The improvement in the labour market in recent years and the recovery in the wider economy have also led to a turning of the migration tide.
In the 12 months to April 2016, the CSO's statisticians estimate that slightly more people came to live in Ireland then departed the country.
And, if anything, those estimates are likely to understate the scale of net inward migration over the past year and more, as they do not incorporate the latest census data, which point to bigger population growth than the demographers had anticipated.
From a labour market and business perspective, one of the most positive aspects of recent inward migration is that a considerable majority of those settling and resettling here are highly qualified.
As previously discussed in this column, Ireland has been different from most other European countries - in that those who come to live here are more likely to be educated to third level and above than those who move elsewhere. That trend has continued according to the latest data.
The figures show immigration has rebounded strongly from a low point in 2010, as illustrated in the first chart, and that most of those arriving were people with third-level qualifications.
In the year to April 2016 such people accounted for 57pc of all immigrants, broadly in line with recent years, but up by 10 percentage points from the beginning of the decade.
Given that the number of graduates immigrating to Ireland last year exceeded the number emigrating for the first time since 2009, it can safely be said that the migration effect on the economy's stock of human capital has turned positive.
What is driving the jobs growth that is attracting immigrants and that has brought the unemployment rate into single digits from its post-crash peak of 15pc? Probably the best way of addressing that question is to look at the CSO's breakdown of employment trends by industry sector.
Since the recovery began in 2012, some industries have hired to beat the band while others have been much more cautious. Let's start with the high-growth sectors (which incidentally includes agriculture, but as the CSO has cautioned about the reliability of their numbers on farming jobs, we'll park discussion of that sector for today).
As the second chart shows, the construction industry has increased employment in leaps and bounds. Having employed more than a quarter of a million people when the property bubble popped, the sector dipped to below 100,000 at its low point at the beginning of 2013. Construction employment then stabilised for a year before taking off in 2014. In the two years to the second quarter of 2016 more than 30,000 people flooded back into work in the building industry. And plenty more jobs are likely to be created in the sector in the coming years.
Another high-growth sector has been hospitality. Restaurants, hotels and pubs have benefited both from a recovery in consumer spending and confidence as well as a strong rebound in tourism. As the second graph shows, however, the pattern of employment growth in recent years has been quite different from construction. As with the building industry, 2012 was not a banner year for hospitality - but unlike construction, 2013 saw an earlier take-off in employment. But numbers then levelled out and since then there's been less growth. That said, total employment in the sector is now more than 20pc above 2012, representing an increase of almost 25,000 jobs.
Boffins and the besuited have also benefited from the upswing. The professional and scientific category of workers has been the third-fastest growing sector for jobs since the recovery began.
This is unsurprising, given the strength of industries such as pharmaceuticals and the wider rebound in the services sector. As of the second quarter, there were 114,000 people employed in this category - up 15,000 on four years ago.
Following behind the three fastest-growing sectors by quite a distance is another group of three: general administration, IT and industry (which is mostly accounted for by manufacturing, but also includes activities such as electricity generation).
As the second chart shows, these three industries have grown employment by between 7pc and 11pc over the past four years. Unlike the three leaders, the pattern over that timeframe has been very similar, with a return to hiring coming more recently than in the frontrunners. As the chart shows, it is only over the past year or so that employment growth has really picked up in these sectors.
If anything stands out about this group it is that industry and manufacturing - which are in long-term decline, at least as far as employment is concerned - have been adding jobs at more or less the same rate as the future-focused and much more glamorous IT sector.
In absolute terms, they have generated three times as much additional employment because they still employ three times as many people as IT. We are still a long way from being a deindustrialised, high-tech economy.
Turning to the sectors that have contributed least to the jobs recovery, we see that financial services and real estate have experienced no recovery when it comes to employment. If that seems surprising, the answer may be in an even more surprising earlier pattern.
Despite these two industries being at the centre of the cataclysm that befell the economy, the decline in total employment in the category was less (10pc) than the average for economy-wide employment (15pc). It was a fraction of the two-thirds decline in the building industry.
It seems that banks and estate agents avoided lay-offs for the most part and hoarded labour. As that hoarded labour was likely to have been underemployed during the recession, there was plenty of capacity for existing staff to deal with additional business without new hiring once the upturn came. Unless there is an influx of Brexitphobic financiers from London, the 100,000 currently employed in this category probably won't grow much in the next few years.
Another sector that has not rebounded (and is unlikely to do so) is the economy's single biggest sectoral employer - wholesale and retail. At the beginning of 2008 there were 320,000 people employed in the sector. Four years later that number had fallen by 50,000. Employment has barely budged since, and that is despite a very strong recovery in retail sales, which in volume terms have returned to 2008 levels.
As previously discussed here, big structural changes in the distribution sector, particularly on the retail side, are likely to account for the absence of employment growth. Growth in online shopping and the rise of less employment-intensive German discounters are among the structural changes.
They won't be reversed. Tills may be ringing louder, but jobs growth in the sector will be slow coming.
Sunday Indo Business