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News : Irish Economy Last Updated: Sep 22, 2010 - 8:00:23 AM

Irish employment decline slows to 4.1% in the year to Q2 2010; Non-Irish nationals accounted for 12.4% of workforce and 46,800 were unemployed; Net emigration rises to 34,500
By Finfacts Team
Sep 21, 2010 - 2:38:37 PM

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Source: CSO

Quarterly Household Survey: There were 1,859,100 persons in Irish employment in the second quarter of 2010, an annual decrease of 79,400 or 4.1%. This compares with an annual decrease in employment of 5.5% in the previous quarter and a decline of 8.2% in the year to the second quarter of 2009. Non-Irish nationals accounted for 12.4% of all persons aged 15 and over in employment and 46,800 were unemployed. Net emigration in the twelve months to April 2010 rose to 34,500 from 7,800 in 2009, the largest net outflow since 1989.

On a seasonally adjusted basis employment fell by 7,600 in the quarter, the lowest quarterly fall recorded since Q1 2008. There was an annual decrease of 55,900 or 5.3% in the number of men in employment, while the number of women in employment decreased by 23,500 or 2.7%.

The overall employment rate among persons aged 15-64 fell by 2.1 percentage points to 60.4%, down from 62.5% in Q2 2009. The employment rate for persons aged 15-64 has fallen on an annual basis in each quarter since Q4 2007 and is now back at a level comparable with that seen in the second quarter of 1998.

In the second quarter of 2010 there were 293,600 persons unemployed, an increase of 29,000 (+11.0%) in the year. This is the lowest annual increase in unemployment since an increase of 23,600 was recorded in the second quarter of 2008. Male unemployment increased by 13,200 (+7.1%), with the number of unemployed females increasing by 15,900 (+20.5%). When seasonal factors are taken into account there was a quarterly increase of 6,300 in the numbers unemployed with the seasonally adjusted unemployment rate increasing from 12.9% to 13.2% over the quarter.

The total number of persons in the labour force in the second quarter of 2010 was 2,152,700, representing a decrease of 50,400 or 2.3% over the year. This compares with an annual labour force decrease of 1.6% or 36,500 in the second quarter of 2009. The overall participation rate declined from 62.5% in Q2 2009 to 61.3% in Q2 2010.

Employment fell on an annual basis in 10 of the 14 economic sectors. The largest decline in employment was again recorded in the Construction sector where the numbers employed fell by 30,100 (-19.4%) over the year. Employment in the Construction sector has now fallen by almost 54% since its peak in the second quarter of 2007. The next largest annual decreases in employment were recorded in the Industry and Agriculture, forestry and fishing sectors where the numbers employed fell by 18,200 (-7.0%) and 12,300 (-12.7%) respectively. The CSO warned about caution in interpretation of the trend in the Agriculture, forestry and fishing sector at this time.

The latest available figures for all EU-27 member states, which are for the first quarter of 2010, show that between the first quarters of 2009 and 2010 Ireland’s employment level fell by 5.7% while its labour force declined by 2.7%. This compares with a decline in employment of 1.3% in the EU-27 countries while the size of the EU-27 labour force increased by 0.2% in the year to Q1 2010.

Ireland’s unemployment rate of 12.8% was 2.8 percentage points higher than the EU-27 average unemployment rate of 10.0%. The estimated EU unemployment rate for May 2010 was 9.6% compared with a seasonally adjusted rate of 13.2% in Ireland for Q2 2010.

Full-time employment declines by 83,200 over the year

Full-time employment fell by 83,200 on an annual basis with declines in both male (-62,900) and female (-20,300) full-time employment. The largest decreases in full-time employment occurred in the Construction (-31,300) and Industry (-17,900) sectors. In the second quarter of 2010, full-time employment for males in the Construction sector was 98,900 compared with a peak of 249,900 in Q4 2006.

There was an increase of 3,800 in the numbers employed part-time, with male part-time employment increasing 7,200 over the year while female part-time employment decreased by 3,200 over the same period.

With the exception of Professional (+11,000) and Associate professional and technical (+1,700), all occupational groups showed a decline in employment over the year. The largest decreases were recorded in the Craft and related (-27,300), Other (-23,200) and Personal and protective service (-10,900) groups.

There were 1,536,900 employees in the second quarter of 2010 representing an annual decrease of 57,100 or 3.6%. The estimated number of self-employed persons in Q2 2010 was 306,700, a decrease of 23,300 or 7.1% over the year.

Source: CSO

Non-Irish national labour force declines by 15%

In the second quarter of 2010 the estimated number of non-Irish nationals in the labour force was 276,500, a decrease of 48,900 or 15.0% in the year. A decrease of 35,200 had been recorded in the year to Q2 2009. The number of Irish nationals in  the labour force was almost static in the year, decreasing by 1,500 to 1,876,200.

According to ILO (International Labour Organisation) criteria, 229,600 non-Irish nationals were in employment in Q2 2010 representing a decrease of 45,000 (-16.4%) over the year. A further 46,800 were unemployed, a decrease of 4,000 in the year to Q2 2010. Nationals of the EU15 to EU27 States showed a decline in employment of 16,100 (-13.0%) and a decrease in unemployment of 2,600 (-9.0%) over the year.

In the second quarter of 2010 non-Irish nationals accounted for 12.4% of all persons aged 15 and over in employment. This compares with 14.2% in Q2 2009 and 15.8% in Q2 2008. Non-Irish nationals accounted for 27.5% of workers in Accommodation and food service activities, 19.2% in Administrative and support service activities and 17.7% in Information and communication. The largest decreases in employment for non-Irish nationals occurred in the Accommodation and food service activities (-8,500) and Construction (-6,900) sectors.

Main Results Q2 2010
Change in Quarter
Change in Year
Labour Force

Long-term unemployment rate increases to 5.9%

In the year to Q2 2010, the number of long-term unemployed persons increased by 69,700, bringing total long-term unemployment to 127,000. The long-term unemployment rate now stands at 5.9% compared with 2.6% in the second quarter of 2009 and 1.5% in the second quarter of 2008. As of Q2 2010, long-term unemployment accounted for 43.3% of total unemployment compared with 21.7% a year earlier.

Quarterly National Household Survey Quarter 2 2010

Davy economist, Aidan Corcoran, commented:

Unemployment rate rose 0.3% in Q2; latest Live Register figures bode ill for Q3

Seasonally adjusted unemployment at 13.2% in Q2

  • The number of unemployed increased by 6,300 in Q2 over Q1, driving the unemployment rate up from 12.9% to 13.2% in seasonally adjusted terms.

  • The numbers employed fell by 7,600 in Q2 – the lowest quarterly decline since Q1 2008.

  • According to the Live Register estimate, the unemployment rate in August was 13.8%. This suggests that Q3 will bring worse news than Q2.

  • The labour force fell 2.3% from Q2 2009, with most of this decline explained by a lower participation rate rather than by emigration.

Few sectors escape labour market squeeze

  • On an annual basis, only four out of 14 sectors showed a gain in employment.

  • More encouragingly, seven sectors showed a quarterly gain in employment, although many of the gains were small.

  • Construction is still the worst hit sector, delivering a 19% drop in the number employed on the year. Since peaking in Q2 2007, employment in this sector has fallen 54%.

Long-term unemployment rate now 5.9%

  • The number of people out of work for more than a year is now 127,000, or 5.9% of the total labour force.

  • This is the highest level since at least 1997 and poses a major public policy challenge.

Source: Goodbody

Goodbody chief economist Dermot O'Leary commented:

Irish job losses easing, but it's slow progress

After this morning's bond auction, it's back to the real economy.

Employment declines easing... - Employment continued to fall, albeit at a slower pace, in the second quarter of the year. The 0.4% quarter-on-quarter decline (seasonally-adjusted) was the smallest since the first quarter of 2008. On an annual basis, employment fell by 4.1%, down from 5.4% in Q1. The official unemployment rate was 13.2% in Q2 (12.9% in Q1), bang in line with the previous estimate from the monthly Live Register. The latest estimate for the unemployment rate 13.8% for August, indicating that conditions may have deteriorated further over the summer months.

...but only three sectors are seeing growth - Unsurprisingly, the construction sector continues to see the largest job losses, with employment down by 19% yoy in Q2. There were 127,000 workers in the construction sector in Q2 2010, some 53% below the peak exactly three years earlier. On an annual basis, employment is growing in only three sectors out of fourteen.

Data in line with estimates, employment growth in H2 2011 - Employment declines are indeed easing, but we would not expect a return to employment growth to occur until the second half of 2011. While the effect of job losses in the construction sector on the overall numbers, the restructuring of the domestic banking sector and the reduction in the number of public sector workers will affect total employment levels in the coming quarters. We have been forecasting employment to fall by 4% in 2010 and by a modest 0.3% in 2011. In this vein, these numbers are in line with our estimates.

Population up modestly... - Irish population statistics released today show that the overall population grew by 0.3% in the year to April 2010. While the natural increase remained strong at just over 1%, this was offset by net outward migration which hit its highest level since 1989.

Dr. Dan McLaughlin of Bank of Ireland commented:

Irish emigration picks up

Employment fell by 0.4% in second quarter…Employment in Ireland has fallen precipitously since the onset of the recession in early 2008, but the pace of decline has slowed appreciably this year; the numbers at work fell by a seasonally adjusted 15,000 (0.8%) in the first quarter and by only 8,000 in Q2 (0.4%), compared with a 3.7% fall in the first quarter of 2009. Moreover, employment actually rose in seven of the fourteen industry sectors, including wholesale and retail, administration and other service activities. Construction saw a further fall, as did manufacturing, the hotel sector and financial services. On an annual basis employment fell by 4.1% or 79,000 in Q2, from 5.5% in Q1 (108,000) and 8.2% twelve months earlier. Construction has borne the brunt of the annual fall with employment in that sector now at 125,000 or 6.7% of the total at work, from a peak of 285,000 (13.7%).

…pulling the unemployment rate up to 13.2%...The labour force also continued to decline in the second quarter, but again at a slower pace, falling by under 4,000. As a consequence the seasonally adjusted unemployment rate rose to a new cycle high of 13.2%, or 28,500 from 12.9% in the first quarter. On an unadjusted basis the total unemployed climbed to 294,000 in Q2 from 265,000 a year earlier, giving an unemployment rate of 13.6% against 12%. The participation rate continues to slow, to 61.3% in Q2 from 62.5% in the second quarter of 2009 and a cycle high of 64.8%.

Net emigration rises to 35,000…The labour force has also fallen as a result of emigration and the CSO published population data today to April 2010, outlining the most recent migration patterns. Net emigration in the twelve months to April 2010 rose to 34,500 from 7,800 in 2009, the largest net outflow since 1989. The year saw further immigration of 31,000 albeit down from 57,000 and the numbers emigrating were unchanged at 65,000. The pattern of that emigration changed though, with over 40% of the total being classed as Irish nationals against 28% a year earlier, with the number of emigrants originally from the EU accession states declining to under 30% of the total, from 46%.

Ulster Bank economist Lynsey Clemenger commented:

A falling labour force is continuing to play an important role in Irish labour market dynamics. As has been the case for a while now, there are two main factors explaining this shrinking workforce. Firstly, there is an ongoing decline in participation rates, particularly amongst younger age groups. The overall participation rate fell to 61.1% in Q2 from 62.4% a year ago, with this factor alone accounting for around two thirds of the 51,300 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 with the CSO estimating that 48,900 non-Irish nationals aged 15 and over left the labour force in the year to Q2.

In terms of the outlook, the Live Register data and employment index of the manufacturing PMI points to further upward pressure on the unemployment rate in Q3. We continue to forecast a peak unemployment rate of between 13.5 and 14.0% by the end of the year on the QNHS numbers, with assumed ongoing declines in the workforce, as opposed to any notable improvement in labour demand, driving our expected stabilisation of the unemployment rate in the final quarter of this year.

Export-led nature of recovery we expect means any notable rebound in employment growth is some way off…

The labour market remains weak for sure, evidenced by the fact that employment is continuing to fall. However, this is to be expected given the lags between changes in economic activity and employment. What is noteworthy is that the pace of job-shedding eased back for the third consecutive quarter in Q2, thereby providing some validation of the more encouraging signals which have been coming through from some other indicators on the economy.

Despite the renewed risks to the global outlook in recent months, we continue to expect that exports will be the main driver of the recovery. However, this will have some important implications for the near-term outlook for employment growth, as the export sector is significantly less labour intensive than others such as construction. So while a continued improvement in the economic environment will translate into an improvement in the labour market situation over time, the nature of the recovery we expect rules out any significant employment gains in the early stages.

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