Forecasting in the Labour Market

Abstract

An assessment of future labour market outcomes is of considerable interest to policy makers and for those making operational decisions with respect to training. These could take the form of forecasts of employment by occupations and skill levels or needs at the national, sectoral or regional level. Often forecasts are make of the demand for labour, both additional and replacement demand, the latter often surpassing the former due to the present demographic composition of the labour force. In order to assess likely future shortages (or surplus) of labour, knowledge of the current supply (not always known with certainty as in the case of seasonal labour) and an understanding of future supply is required, all of which pose considerable challenges. In this paper, an overview of the forecasting needs of the Department of Labour, approaches and methodology likely to be applicable and the required level of accuracy and relevance of forecasts are discussed in relation to national, sectoral, regional and seasonal labour market outcomes. Some preliminary and provisional results are presented as an illustration of likely outcomes.

In summary, the total employment level is expected to show and annual average growth of 1.8% from 2005 to 2010, following a higher annual average growth of 2.8% from 2001 to 2005. However, for the Primary and Manufacturing Sectors, the employment is likely to transform to a positive growth at an average rate of 1.0% and 0.3% respectively from 2005 to 2010 after having experienced a decline from 2001 to 2005. However, for the Private and Public sectors services, employment is expected o increase at an average rate of 1.7% and 2.8% respectively from 2005 to 2010 following a higher growth rate of 3.3% and 4.8% respectively from 2001 to 2005. The consequences of a number of variations in GDP growth and employment ratios by industry are explored in terms of occupational forecasts.