Ireland: Three months after the Coalition announced that a full-employment target had been brought forward to 2018 from 2020, the 'Stability Programme April 2015 Update' report that was prepared for the European Commission and published Tuesday, shows that neither a full-employment target will be achieved in 2018 or 2020 (see chart above).
Last January after what was called a 'Jobs Cabinet,' Enda Kenny, taoiseach, announced that full-employment would be achieved by 2018 based on an unemployment rate of up to 6%. Economists at the Department of the Taoiseach had produced the target based on unreliable survey data and it was estimated that about 160,000 net jobs would be added in 2015-2018. There was no assumed labour participation rate published nor estimated migration trends.
Economists at the Department of Finance in the stability update report, assume that 200,000 net jobs will be added in the four years 2015-2018 and the official jobless rate will be 7.8% in 2018 and 6.9% in 2020. The economists say: "Alongside employment growth, aggregate labour supply is expected to respond positively with the dominant contribution coming through the demographic channel, including net inward migration over the medium term."
The average of 50,000 net jobs added each year compares with 29,000 in 2014 and crucially, only 30% are expected to be provided by the international tradeable exporting sectors.
Where will the other 140,000 net jobs come from?
IDA Ireland, the Irish inward investment promotion agency, has forecast that its client companies will add 7,000 net jobs annually in the period 2015-2019. Enterprise Ireland, which supports indigenous exporting firms, has forecast 40,000 gross jobs in client firms in 2015 and 2016. In 2014 19,700 gross jobs at client firms resulted in 8,500 jobs in the year.
In the period 2015-2018, 28,000 IDA Ireland client jobs plus 34,000 at indigenous exporters results in a total of 62,000.
Jobs growth resumed 2012 and in the two years to the end of 2014 only 7,000 or 8% of the 90,000 jobs added were in the Industry and ICT (information and communications technology) sectors.
The chart below shows the areas of jobs growth in 2013-2014.
Accommodation and food service activities at 19,000 jobs added in 2013/2014; Agriculture etc at 16,000 and Construction at 14,000 were the top jobs growth sectors.
According to the latest official data, there are 437,000 people on the Live Register and in publicly funded activation schemes, which amounts to 20% of the workforce — in the US this would be termed the broad unemployment rate.
Eurostat reported this week that in 2014 on average 29% of Irish part-time workers or 128,000 were underemployed i.e. seeking more hours, and 46,000 were not in the workforce but are potential workers.
© Copyright 2015 by Finfacts.ie