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News : Irish Economy Last Updated: Jun 17, 2011 - 7:53 AM

Irish unemployment rate fell to 14% in Q1 2011; Full-time jobs dipped by 67,000 in year; Public sector employment down 3,700 to 400,000
By Finfacts Team
Jun 16, 2011 - 11:45 AM

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Source: CSO

The seasonally adjusted Irish unemployment rate decreased from 14.8% to 14.0% between the fourth quarter of 2010 and the first quarter of 2011 with the seasonally adjusted number of persons unemployed decreasing by 21,900 (-6.9%) from 317,900 to 296,000 over the same period. Full-time employment fell by 67,000 in the year and public sector employment.

The Central Statistics Office said this partially reverses the increase in unemployment recorded on a seasonally adjusted basis between the third and fourth quarters of 2010 when the seasonally adjusted unemployment rate had increased from 13.5% to 14.8%.

The movements in the seasonally adjusted series are occurring despite relatively little change in recent quarters in the unadjusted number of persons unemployed which has fluctuated between 293,600 and 299,000 for the last 4 quarters. In the first quarter of 2011 there were 295,700 unemployed persons an increase of 20,700 (+7.5%) on the 275,000 recorded one year previously.

 Quarterly National Household Survey Quarter 1 2011 (pdf)

Summary Points for January to March 2011

The number of employed persons in the first quarter of 2011 was 1,804,200,  an annual decrease of 53,400 or 2.9%. This compares with an annual decrease of 3.4% in the previous quarter and a decrease of 5.5% in the year to Q1 2010. This annual decrease of 2.9% is the lowest since the third quarter of 2008 when the number of persons in employment decreased on an annual basis by 2.0%.

On a seasonally adjusted basis, employment fell by 9,300 (-0.5%) in the quarter. This follows on from a seasonally adjusted fall in employment of 12,600 (-0.7%) in Q4 2010.

Male unemployment increased by 6,900 (+3.5%) to 201,800 over the year while female unemployment increased by 13,600 (+17.0%) to 93,800.

The long-term unemployment rate increased from 5.3% to 7.8% over the year to Q1 2011. Long-term unemployment accounted for 55.1% of total unemployment in Q1 2011 compared with 40.9% a year earlier and 22.0% in the first quarter of 2009.

Source: CSO

Goodbody, chief economist, Dermot O'Leary, commented:

Although the Irish labour market remains very weak, the decline in employment in Q1 2011 was the lowest since Q1 2008.

Employment still falling but at the slowest pace since 2008 - The 0.5% qoq (seasonally-adjusted) fall in employment was the slowest rate of decline since Q1 2008. The annual rate of decline also slowed to -2.9%, from -3.4% in Q4 2010. The unemployment rate, which had risen from 13.5% in Q3 2010 to 14.8% in Q4 2010, reversed some of this fall to stand at 14% in the first three months of 2011.

Construction, hotels and restaurants the major drags - The thirteenth consecutive quarter of decline in employment leaves employment levels down 15% from the peak. Construction accounts for roughly half of this decline, with industry and retail and wholesale jobs accounting for a further c.30%. Over the most recent twelve months, construction has continued to be the major drag, falling by 17% yoy, but there are more recent signs that employment in the sector, having fallen by 60% already, is beginning to stabilise. The same cannot be said for accomodation and food service activities, where a large decline in Q1 has left employment in this sector down 17% yoy. This is a sector which is continuing to be affected by a weak consumer spending environment. Recent initiatives in the tourism sector, including the marketing campaign around the visits of Queen Elizabeth and President Obama, are aimed at addressing this problem.

Strong FDI feeding through in some sectors - Among the limited bright spots in the employment data was the increase in “Professional, scientific and technical activities”. Employment in this sector grew by 4.5% qoq in Q1 (0.4% yoy) and is likely to be a reflection of the continued success of Ireland in attracting FDI into the country. One would have expected ICT employment to be up also, but this has not been the case over the past two quarters at least (-4.9% yoy in Q1).

Decline in hourly earnings is modest - While average hourly earnings continued to fall in Q1 2011, the annual drop of 0.1% represents a slowing in the pace of decline from the -1.7% yoy pace in Q4 2010. The drop in average weekly earnings of 1.3% is thus largely a result of the 1% reduction in hours worked.

Falling labour force largely due to lower participation - Due to a combination of lower participation and emigration, the labour force continues to decline. In Q1, the labour force fell by 1.5% yoy, and is down c.6% from the peak. Lower participation continues to be the main feature though, with the rate falling to 60.4% in Q1, its lowest level since 2003. The largest changes in the participation rates in the past year have occurred in 20-24 and the 60-64 age groups, reflecting a return to education and early retirement, respectively.

Non-Irish nationals in labour force down 12% yoy - The decline in the labour force due to emigration continues to be attributed to non-Irish nationals, although we won’t get verified data on these flows until the release of the population data later in the year. The number of Irish nationals in the labour force was effectively flat in the last twelve months, while the number of non-Irish nationals in the labour force fell by 12.4%. These data broadly indicate that the majority non-Irish nationals losing their jobs are leaving the country.

Source: Goodbody

Speaking from the United States (via his alter ego in the press office) where he is on a week-long trade mission meeting some of the world’s biggest IT companies in an attempt to secure new investment and employment for Ireland, Minister Richard Bruton commented on this morning’s unemployment figures:

“The decline in the unemployment rate from 14.8% in the last quarter of 2010 to 14% in the first quarter of 2011 is to be welcomed, but today’s figures remind us once again the scale of the unemployment challenge facing  a new government. Emigration is now draining our country and our economy of some of our best and brightest people and we must do everything we can to create opportunities for them to stay here and contribute to our recovery. That was one of the key focuses of the recent Jobs Initiative.

“I have said repeatedly that Government itself does not create employment, but it has a crucial role in creating the environment where businesses can grow and create those much-needed jobs.

“I am determined to urgently implement a series of reforms to reduce business costs, increase access to finance and to encourage and support innovation in every way possible. The public sector, as a major economic actor in its own right, also has a key role in providing leadership in each of these areas and it is crucial that job creation becomes the top priority of organisations across government in a very real way.

“It took many years of misguided policies to get our country into the jobs crisis we face now and it will take a number of years of the right policies to get us out of it. That is why there isn’t a moment to lose in driving on with the reforms and policy changes needed to help turn our shared fortunes around.”

Source: Goodbody

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