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Irish full-time employment fell by 115,700 in 12 months to Jan/Mar 2010; 112,600 unemployed for longer than 1 year
By Finfacts Team
Jun 15, 2010 - 3:05:15 PM
Irish full-time employment fell by 115,700 on an annual basis
with declines in both male (-91,800) and female (-23,900) full-time employment
in 12 months to Jan/Mar 2010. The number of people unemployed for at least
a year (long-term ) rose to 112,600.
In its
Quarterly Household Survey, the Central Statistics office (CSO) said today
that the largest decreases in full-time employment occurred in the
Construction (-53,600) and Industry (-19,500) sectors. In the
first quarter of 2010, the Construction sector accounted for 11.9% of all
male full-time employment compared with 16.1% for the first quarter of 2009.
There were 1,857,600 persons in employment in the
first quarter of 2010, an annual decrease of 108,000 or 5.5%. This compares with
an annual decrease in employment of 8.1% in the previous quarter and a decline
of 7.5% in the year to the first quarter of 2009. There was an annual decrease
of 80,400 or 7.5% in the number of men in employment, while the number of women
in employment decreased by 27,500 or 3.1%.
Number
of unemployed increases to more than 275,000
There were 194,900
males and 80,200 females unemployed in the first quarter of 2010, bringing the
total number of unemployed up to 275,000, an increase of 52,200 (+23.4%) in the
year. The number of unemployed males increased by 36,500 (+23.0%), with female
unemployment increasing by 15,700 (+24.3%).
On a seasonally adjusted basis the number of persons unemployed decreased by
7,300 between Q4 2009 and Q1 2010.
Long-term unemployment
rate increases to 5.3%
In the year to Q1 2010, the number of long-term
unemployed persons increased by 63,500, bringing total long-term unemployment to
112,600. The long-term unemployment rate now stands at 5.3% compared with 2.2%
in the first quarter of 2009. As of Q1 2010, long-term unemployment accounted
for 40.9% of total unemployment compared with 22.0% a year earlier.
Main Results Q1 2010
Persons
Change in Quarter
Change in Year
Employment
1,857,600
-30,100
-108,000
Unemployment
275,000
+7,600
+52,200
Labour Force
2,132,700
-22,500
-55,700
Commenting on the latest
snapshot of the labour market provided by the CSO's Quarterly National Household
Survey, IBEC Senior Economist Fergal O'Brien said: "It
is now clear that the worst of the job losses are behind us. Employment in the
majority of sectors has stabilised over the past couple of quarters, and some of
the high-tech sectors have actually recorded a little job growth over the past
year. However, job losses are continuing in the construction sector and there is
no evidence yet that this sector has bottomed out.
"The unemployment rate now looks fairly close to its peak but unfortunately this
is largely occurring as a result of falling participation rates and outward
migration. The participation rate has dropped by nearly 3% over the past two
years as many people have stopped seeking work. Emigration continues to moderate
the unemployment rate and it is estimated that about 60,000 non-nationals have
left Ireland over the past year. This represents a further difficulty for many
businesses involved in the domestic economy.
"Government's response to the unemployment problem must now move from crisis
management to more strategic measures needed to address the rapidly growing
long-term unemployment problem. Reform of labour market policies and continued
investment in training and upskilling measures are essential if crippling
structural unemployment problems are to be avoided."
There has been a more positive tone
to Irish data releases of late. On the employment front, an easing rate of
decline is in train, but a return to jobs growth will be a slow process.
Easing rate of job losses - Employment in Ireland is still falling, but
at a slower pace. In Q1, employment declined by 0.9% quarter on quarter
(seasonally-adjusted), relative to -1.1%, -1.9%, and -1.6% in the previous three
quarters, respectively. The peak-to-trough decline is an enormous 12%, but as
the drag from the collapse in the construction sector wanes, it is likely that
employment declines will continue to ease.
Unemployment rate down, but reasons matter - The unemployment rate
actually declined from 13.3% to 12.9% in the first quarter
(seasonally-adjusted), but this is due to a falling labour force. While some of
this decline (30%) is due to what the CSO call “demographic” effects (i.e.
increased emigration), the other 70% is due to falling participation in the
labour force. Labour force participation fell to 60.7% in Q1, its lowest level
since 2004. This, in turn, can be explained by: (1) early retirement and; (2)
chronically high unemployment in the younger age cohorts (24.9% for 20-24 year
olds for example), causing some to leave the labour force completely.
Majority of construction losses have already occurred - Almost half of
the job losses so far have stemmed directly from the construction sector.
Peaking in Q2 2007 at 274,000 workers (12.9% of total), this sector employed
131,000 in Q1 2010 (7.0% of total).
Some sectors showing jobs growth - Some sectors are creating jobs.
Although we questioned the sustainability of the job gains in the hotels and
restaurant category in Q4 2009, we are encouraged by the fact that more jobs
were added in Q1 2010. On annual basis, employment is up 4.7% in this sector.
The ICT sector also added jobs (1.9% yoy). This is an area that will continue to
benefit from an upturn in global demand and the improvement in competitiveness
domestically.
Labour market turnaround is a slow process - We recently upgraded
forecasts on the basis of a range of different indicators suggesting that the
economy has stabilised. These data do not change that view but they do indicate
that the onset of employment growth will be a slow process. With public sector
jobs only little changed thus far and the restructuring of the domestic banks
likely to lead to job losses in that sector, easing rates of decline will
feature, but we will have to wait until 2011 for net jobs growth.
Bank of Ireland commented:
Q1 Unemployment rate revised down
Employment still falling but at much slower pace…Irish
employment on a seasonally adjusted basis started to fall in the second quarter
of 2008 and the pace of decline reached a peak in the first quarter of 2009 with
a 3.6% fall. The rate of job loss slowed to 1.2% in the final quarter of 2009
and the latest figures from the Quarterly Household Survey reveal a further
moderation; employment fell by 0.9% on a seasonally adjusted basis in the first
quarter of 2010 or by just 17,000. The annual pace of job loss also slowed
appreciably to 5.5% from 8.1% in the fourth quarter of 2009.
With job gains in some sectors…The construction sector is
still the main culprit in terms of job loss, with another 4,000 seasonally
adjusted fall in the first quarter, leaving employment in the sector at 131,000
or 7% of the total in work, compared with a cycle high of 285,000 (13.7% of the
total in employment). The first quarter also saw other sectors shedding labour
including agriculture (-6,000), administrative and support services (-4,000) and
manufacturing (-2,000) but a number of sectors generated employment, albeit
largely in the public sector, including health (1,000), education (2,000) and
public administration (1,000).
There was also marginal job growth in private sector services
including accommodation, information and communication and professional and
scientific. The unemployment rate was revised down to 12.9%...The unemployment
rate is derived from the Household Survey and on a seasonally adjusted basis
emerged at 12.9% in the first quarter, down from 13.3% in the previous quarter.
This is substantially below the published monthly estimates of
13.4% for the first three months of the year, implying the latter will now be
revised down. The actual number classified as unemployed actually fell in the
quarter on a seasonally adjusted basis to 277,000 from 285,000 although the
labour force also declined by some 14,000.
Ulster Bank economists Simon Barry and Lynsey Clemenger
commented:
There have been numerous indicators in the past few months
suggesting the Irish economy is now in the process of recovering. These include
a firmer tone to retail sales, large Q1 increases in industrial production and
exports, and signs from the PMIs of a return to growth in the services sector.
Today’s Quarterly National Household Survey (QNHS) provides the most
comprehensive information on the state of the labour market and while it
certainly does not paint a picture of outright improvement, there are some
encouraging aspects nonetheless.
On the employment front, the numbers tell us that the economy is still shedding
jobs. In fact, the level of employment in the first quarter stood at a
seasonally-adjusted 1.87 million, the lowest level in some six years, following
a decline of 55,000, or 5.5%, in the past year. However, looking a year-on-year
changes will always obscure the more important point which is what has been
happening in the most recent quarter.
Comparing Q1 of this year with Q4 of last, the economy lost 17,300 jobs which is
certainly not good news. However, that does represent a clear continuation of
the recent trend which is that while employment is declining, it is doing so a
much less rapid pace than previously. In fact, that is the smallest quarterly
fall in employment in two years and is way less severe than the staggering
weakness from the same period last year when employment fell by over 76,000.
At a sectoral level, outside of agriculture (where survey
problems are making it difficult to get an accurate read at present) the largest
fall in Q1 was a 4,100 decline in construction employment. However, this was the
smallest quarterly decline since the final quarter of 2007 – an indication that
the intensity of layoffs in the hardest hit sector of the economy is easing off.
Interestingly, a few sectors actually managed some small gains in employment in
Q1. These included: accommodation and food service activities, information and
communication, professional, scientific and technical activities as well as
education and health. In total, these sectors managed to create an additional
4,200 jobs last month which was obviously more than fully offset by weakness
elsewhere. Nonetheless, this does reveal some early evidence of stability in the
demand side of the labour market, even if it will likely take more time for
definitive signs of broad-based improvement to come through.
Somewhat surprisingly, the numbers unemployed fell back by 7,300 between the Q4
of last year and Q1 of this year, the first quarterly decline in unemployment
since the modest 1,000 fall in Q3 2007. We also saw a moderation in the
unemployment rate from (an upwardly revised) 13.3% in Q4 2009, to 12.9%. While
this is certainly an encouraging development, it likely exaggerates the extent
of the improvement, with the easing back in the unemployment rate importantly
linked to the 13,700 decline in the labour force in the quarter.
In the year to the first quarter of 2010, the workforce declined by 55,300 to
2.15 million. There continues to be two main factors explaining this shrinking
labour force. Firstly, there is an ongoing decline in participation rates. That
is, a smaller proportion of the population of working age are choosing to
participate in the jobs market. The overall participation rate has fallen to
61.5% from 62.5% a year ago, with this factor alone accounting for almost 70% of
the fall in the workforce over the period. Secondly, outward migration is also
continuing to play a role in the adjustment underway in the Irish labour market.
The CSO estimates that 59,600 Non-Irish nationals aged 15 and over left the
country in the year to Q1, contributing 53,500 to the decline in the labour
force over this period.
It is important to point out that the QNHS measure of the
unemployment rate is the official one. However, the more timely Live Register
estimate of the unemployment rate is generally a reasonably good guide, and
points to further upward pressure on the rate in the second quarter. While we do
expect the official unemployment rate has further to rise, increases from here
will be relatively minor given the ongoing decline in the workforce we
anticipate, in addition to an easing in the rate of decline of labour demand as
the economy shows greater signs of recovery. We continue to forecast a peak
unemployment rate of between 13.5 and 14% on the QNHS numbers, with these latest
figures suggesting the outturn may be at the lower end of this range.
