Bank of Ireland says updated data points to firmer end-2025 momentum and support its outlook for 2026.
Ireland’s labour market ended 2025 in a healthier position than previously reported, according to Bank of Ireland, after fresh revisions from the Central Statistics Office showed a stronger pick‑up in employment and a lower unemployment rate than first estimated.
Employee numbers rose 2% in the year to December, reaching a record 2.58 million. The latest figures marked a rebound from the subdued 0.6% pace initially reported for November, which has since been revised to 1%.
“It was satisfying to see the unemployment rate revised down to 4.7%”
Conall Mac Coille, Bank of Ireland’s chief economist, said the updated release provided a clearer picture of underlying conditions.
“This morning’s data show employment growth accelerating to 2% in December. We are acutely aware the CSO’s first estimate of employee growth is typically revised up. In time, the initial 2% growth rate will likely be revised towards 2.5% as additional tax returns are collected,” he said.
Firmer pace of growth anticipated
The revisions follow the CSO’s downward adjustment of the Irish unemployment rate to 4.7% for January, compared with the original Q4 estimate of 5%. Bank of Ireland had anticipated the revision in its forecasts, arguing that temporary seasonal factors had overstated weakness in the labour market during mid‑2025.
Mac Coille said the updated unemployment reading aligned with that view. “Volatility in the data and seasonal factors the CSO struggle to adjust for were at play. Youth unemployment rose to 12.6% in July, likely related to school and university closures. So it was satisfying to see the unemployment rate revised down to 4.7%.”
The Bank expects the updated figures to feed through to the Labour Force Survey for Q4 2025, due next week. It believes headline employment growth will show a firmer pace than the relatively modest 1.1% increase to 2.8 million recorded in Q3. At that point, construction and transport were among the strongest‑performing sectors, growing 7% each, alongside solid gains in education and health. Consumer‑facing industries showed little progress, with wholesale and retail employment rising 0.4% and hotels and restaurants recording no growth.
Employment in multinational companies softened through 2025, according to recent results from the IDA. Jobs in IDA‑supported firms grew 1.5% overall to 312,500, with a clear divide between a 3% rise in manufacturing roles and a flat picture in the technology sector, where employment grew just 0.5% to 77,800.
IDA Ireland said investments announced during the year were expected to generate 15,300 jobs over several years.
A separate survey by the American Chamber of Commerce found that 60% of US multinationals operating in Ireland plan to expand their workforce, though many flagged housing shortages as the most significant constraint.
Bank of Ireland said the broader slowdown in job creation was expected, given the exceptional pace of growth in recent years and the strong contribution from net inward migration. It forecasts employment growth of 1.5% in both 2026 and 2027, with the unemployment rate remaining just below 5% this year.
Mac Coille said the latest CSO release supported that outlook. “These data are an encouraging sign the pace of job creation has not slowed at a sharper or more pernicious pace than our forecast and remained robust at the end of 2025.
“The 3% plus rates of jobs growth seen in recent years will inevitably slow, as they were sustained by exceptional levels of net inward migration and rising participation, both of which will now contribute less to labour force growth.”
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