The Irish workforce is set to grow by between two per cent and three per cent, according to an economic forecast from Davy.

Despite the economic turbulence created by Donald Trump's tariffs and a small rise in unemployment, the financial services firm is still predicting growth this year.

Ireland’s seasonally adjusted unemployment rate rose to 4.9 per cent in July 2025, up from a revised 4.6 per cent in June and 4.5 per cent in July 2024, according to the latest figures from the Central Statistics Office (CSO).

This marks an increase of 12,700 people unemployed compared to a year earlier.

However, according to Davy's own analysis employment growth picked up 2.5 per cent in the second quarter from 2.3 per cent in Q1, with growth remaining stronger for higher wage sectors.

“With prior-year revisions to May and June factored in, we estimate that Q2 employee payrolls grew by 2.5 per cent in year-on-year terms,” said Kevin Timoney, an economist with Davy.

“This is up from 2.3 per cent in Q1 and is a remarkably strong result despite significantly elevated uncertainty in the first half of this year.”

Davy’s analysis of Irish payrolls data shows that February is typically the low point for employment each year, while hiring numbers jump between March and June.

“This makes sense from the perspective that seasonal labour demand for spring and summer workers is highest, and hiring is often necessary in advance of peak months for activity,” it said.

“With last year’s revisions to June payrolls included, this suggests an uplift for March-June 2025 of 75,000 workers. The corresponding increases in 2023 and 2024 respectively were 69,000 and 72,000.”

Davy says the data suggests 2025 is on course to be another year of increased employment.

High-skill sectors, those with above-average hourly wages, are continuing to drive the growth.

“For the first six months of 2025, the average growth rate for these sectors has exceeded growth for lower-pay sectors by 0.9 of a percentage point,” the Davy analysis says.

“By age group, it is interesting that Q2 saw an increase in year-on-year payrolls growth for young adults to 1.9 per cent, up from 1.3 per cent in Q1 and 1.2 per cent in Q2 2024.

"Other age groups saw broadly steady payroll growth rates relative to recent months.”

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