As the Irish economy began to contract in the first half of this year, the number of people employed in financial services continued to grow, albeit at a slower rate than previously, according to the latest quarterly report from Bank of Ireland. However, the latter part of 2008 doesn’t look so positive and redundancies could be on the cards next year.

Figures from the Central Statistics Agency show that the number of jobs in the business and financial sector increased by 9,000 in the first half of this year, while other sectors – most notably construction – were subject to increased unemployment.

However, though these are the latest publicly available figures, they were compiled before the problems escalated in the third quarter.

Michael Crowley, senior economic at Bank of Ireland, tells us that the increase in employment in the financial sector in the first half of 2008 was considerably smaller than in previous years and that he expects growth will slow in the final two quarters.

For example, numbers employed in financial and other business services increased by 19,000 from May 2006 to the same period in 2007, according to CSO figures.

Crowley adds: “Given the downturn in the economy and the difficulties in the banking/financial sector, at the very best they’d be no job growth next year, but we would expect employment numbers to fall.”

Bank of Ireland’s predictions come after Citibank Europe’s chief executive, Aidan Brady, warned last week that Dublin’s International Financial Services Centre should prepare itself for big losses going forward.