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Despite the surge in exports, by 2009, the numbers employed in foreign-owned enterprises was back to the 1998 level. In 2008, the total value of exports from Irish-owned companies reached only €13.4bn.
Irish Jobs Crisis: There was better jobs reports data than in recent times on the
jobs market yesterday but rising emigration was likely a factor while market
demand continues to be the key for significantly cutting the jobless numbers.
The number of redundancy claims received by the Department for for
Enterprise, Trade and Innovation in October was 3,910 - - down 40% on the figure
for last October - -and the minister, Batt O'Keefe, who is in the Middle
East on a trade mission, broke from normal practice of not commenting on
redundancy data but couldn't avoid some spin. He said: "These trends, allied
with our strong export performance, healthy foreign direct investment pipeline
and declining unemployment figures, are very encouraging signs of economic
Maybe or maybe not.
The biggest news yesterday was the fall in October's Live Register figures
which reflect unemployment, part-time work, PRSI credit claimants and others on
Following six consecutive monthly increases in
numbers on the Live Register (LR) over the period March-August, the data showed
an improvement for the second month running in October. The seasonally adjusted
6,600 fall in the number claiming unemployment benefit represented the largest
monthly drop in some fourteen years - - since October 1996.
In seasonally adjusted terms, the numbers
signing on the Live Register fell by 6,600 to 429,553 in October and more than one in three claimants had been out of work for more than 12
months. In October 2009, the proportion was just over one in
Brian Devine, economist at NCB Stockbrokers commented:
have no timely data on employment creation and emigration. In other words it is
impossible to decipher whether emigration rather than job creation is causing
the large outflows from the live register. It is likely a combination of both,
as even in the good times Ireland was characterised by a large amount of churn
in the labour market, with for example approximately 13% job gains in 2006
versus 10% job losses for a net gain of 3%. This points to the flexibility of
the Irish labour market, which is ultimately required for Ireland to dig its way
out of its problems."
Further to Brian Devine's reference to 2006, it
should also be said that 83,000 net new jobs were added in that peak bubble year
with only 6,000 in the international goods and services sectors - - equally
split between foreign-owned firms and indigenous ones.
Ballina in County Mayo
had the highest unemployment rateamong large Irish towns,
with 15.8% of its labour force out of work. Tralee (14.2%) and Dundalk (13.9%)
also had high unemployment at the time of the 2006 census while at the other end
of the scale Malahide (4.3%) and Leixlip (4.4%) had the lowest rates.
This was Ballina during a boom!
We recently said that at least 180,000 net new
jobs are required to return to full employment, without allowing for working age
This is a challenge that gets little attention and
it's clear that Minister Batt O'Keefe and his colleagues are happy with existing
mantras -- which should be discredited on the basis of the facts.
Last month economists at the US think-tank, the Brookings
Institution, issued revised estimates of the US 'jobs gap' - - the number of
jobs that needs to be created for the economy to return to pre-recession
employment levels and to absorb the 125,000 new entrants to the labour force
Based on the September unemployment numbers, the Brookings'
economists estimated the job gap grew to 11.9m jobs, widening for the fourth
month in a row.
The economists said that if the economy adds about 208,000 jobs per month
(the average monthly rate for the best year of job creation in the 2000s) then
it will take almost 12 years to close the job gap. At a more optimistic rate
of 321,000 jobs per month (the average monthly rate for the best year of the
1990s) the economy will reach pre-recession employment levels only after five
The Irish Times is this week publishing a series of articles on the jobs market
with a focus on improving employbility through training and labour market
Using a rebranded FÁS to
provide more courses is not a good idea and a new State agency should have input
from overseas professionals who have proven track records in this area.
Given that only 11,000 net jobs were added in the Irish
internationally traded goods and services sector in the period 1998-2007, how
long will it take to add say 200,00 net new Irish jobs, without allowing for
changes in population?
Irish Prime Minister Brian Cowen joined CNBC to discuss the country's economic outlook. The cost of protecting Irish government debt against default jumped to a historic peak on Wednesday as investors fretted about the cost of bailing out its shaky banking system:
The issue of unemployment is still dominated by spin and denial.
The world has changed and the question now is how much of unemployment is
cyclical and how much structural?
It's just not good enough to talk about foreign direct
investment (FDI) pipelines and rising exports while being blind to emerging
As illustrated by the chart above, exports grew more than 50% in nominal terms in the past decade but no net jobs were added.
The US-dominated pharmaceutical/medical devices sectors
account for more than half of Irish merchandise exports but most of the
announcements on jobs in these sectors in the past 2 years have been on cuts.
Besides, with patent expirations and a low flow of new products from massive R&D
spending, the industries face big challenges.
The centre of global economic gravity is gradually moving to Asia
where they are developing educated workforces.
Ireland remains very dependent on US firms but as a
manufacturing location, we are remote from the fastest growing global markets.
While we will likely pick up some FDI projects from China and India in coming
years, our past experience with Japanese
and South Korean FDI investments hasn't been good.
Irish competitiveness has improved because of the recession
rather than reform and while it helps, developing presences in international
markets is usually a long, hard slog.
Foreign firms are responsible for 90% of exports and decisions
regarding destinations are not usually made in Ireland.
There is no obvious growth engine despite the mantras on
exports; only fools believe that university research is the main answer; upskilling and short-term measures can have some short-term benefit, but why
should we believe that we can generate jobs from multinational exports to
debt-challenged advanced countries now, given the very poor recent record during
unprecedented credit and asset booms?
“The one area where we significantly lost our way from a business perspective is competitiveness. The costs of doing business in Ireland had grown excessively. That is coming into line very very quickly” Gary McGann, CEO of Irish paper and packaging company Smurfit Kappa Group told CNBC: