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News : Irish Economy Last Updated: Jun 8, 2012 - 7:36 AM


Irish Economy 2012: Irish unemployment rate jumps to 14.8% -- highest since economic crash in 2008
By Finfacts Team
Jun 7, 2012 - 3:34 PM

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Source: Goodbody

Irish Economy 2012: The Irish unemployment rate has risen to its highest level since the economic crash in 2008, jumping to 14.8% from 14.5% in the first quarter of 2012 from the previous quarter.

The Standardised Unemployment Rate was 16.3% in 1988; 3.9% in 2001; 4.6% in 2007; 11.8% in 2009 and 13.6% in 2010 and 14.6% in December 2011.. 

The CSO said that there was an annual decrease in employment of 1.0% or 18,100 in the year to the first quarter of 2012, bringing total employment to 1,786,100. This compares with an annual decrease in employment of 0.8% in the previous quarter and a dip of 2.9% in the year to Q1 2011.

Unemployment increased by 13,300 (+4.5%) in the year to Q1 2012. This brings the total number of persons unemployed to 309,000 with male unemployment increasing by 3,600 (+1.8%) to 205,400 and female unemployment increasing by 9,800 (+10.4%) to 103,600. Meanwhile, the long-term unemployment rate (jobless for a year or more) increased from 7.8% to 8.9% over the year to Q1 2012. Long-term unemployment accounted for 60.6% of total unemployment in Q1 2012 compared with 55.1% a year earlier and 40.9% in the first quarter of 2010.

Employment rose by 11,000 on a seasonally adjusted basis in the final quarter of 2011, the first rise in four years, but it fell by 7,300 in the first quarter, damping optimism that job losses may be on a downward trend.

The CSO said that a large number of retirements and staff reductions in various sections of the public sector is reflected in some of their findings for this quarter, in terms of the number of people at work.

The number of employees in the public sector declined by 21,900 (-5.4%) in the year to Q1 2012, bringing the total number of employees in the public sector to 385,300. However, the numbers for Q1 2011 include 5,300 additional temporary Census field staff who were employed during the periods covering Q1 and Q2 2011. When these staff are excluded the number of employees in the public sector declined by 16,700 (-4.2%) in the year to Q1 2012. The total reduction in employment in the public sector over the three years from Q1 2009 to Q1 2012 was 35,700 (-8.5%).

The number of employees in the private sector increased by 1.2% over the year to Q1 2012, compared with a drop of 4.2% in the year to Q1 2011. The total reduction in the number of employees in the private sector over the three years from Q1 2009 to Q1 2012 was 98,000 (-8.1%).

Source: CSO

Quarterly National Household Survey [pdf]

Number of Persons in Employment

  • There was an annual decrease in employment of 1.0% or 18,100 in the year to the first quarter of 2012, bringing total employment to 1,786,100;
  • On a seasonally adjusted basis, employment fell by 7,300 (-0.4%) in the quarter. This follows on from a seasonally adjusted increase in employment of 11,100 (+0.6%) in Q4 2011;

Number of Persons Unemployed

  • Unemployment increased by 13,300 (+4.5%) in the year to Q1 2012. This brings the total number of persons unemployed to 309,000 with male unemployment at 205,400 and female unemployment at 103,600;
  • The long-term unemployment rate increased from 7.8% to 8.9% over the year to Q1 2012. Long-term unemployment accounted for 60.6% of total unemployment in Q1 2012;
  • The seasonally adjusted unemployment rate increased from 14.5% to 14.8% over the quarter.

Labour Force

  • The total number of persons in the labour force in the first quarter of 2012 was 2,095,100, representing a decrease of 4,800 (-0.2%) over the year.

Quarterly National Household Survey Quarter 1 2012 

Main Results Q1 2012
January-March 2012
Annual Change
Employed
1,786,100
-18,100
Unemployed
   309,000
+13,300
In labour force
2,095,100
   -4,800
Not in labour force
1,409,900
  +2,200

Dermot O'Leary, chief economist, Goodbody comments:

Employment resumed its decline in Q1 and the unemployment rate hit a new high. A public/private dichotomy is also emerging due to the fiscal consolidation process.

Employment down again in Q1 -  Following its first increase in four years in the final three months of 2011, Irish employment resumed its downward trend in Q1 2012. The latest Quarterly National Household Survey shows that employment fell by 0.4% quarter-on-quarter (+0.6% qoq in Q4 2011). This is largely in line with our forecast of a 0.2% decline. There was also an increase in the unemployment rate to 14.8% in Q1 (from 14.5% in Q4), taking it to a new high in this cycle and to its highest level since 1994.  

Five sectors increased employment over the last 12 months -  Five of the fourteen employment categories experienced an increase. The largest positive contributor to employment over the twelve months was accommodation and food services (+8.5% yoy), with strong growth in the information and communications technology (+6.7% yoy) also contributing. The former is surprising but may be partly reflective of a very weak Q1 2011. The latter reflects the success of Ireland in attracting FDI in the IT sector in particular into the country.  

Significant job shedding continues in some sectors -The weakest categories are “professional, scientific and technical“ (-7.2% yoy), "other” (-6.5% yoy) and “public administration and defence” (-6.3% yoy). The number of persons employed in the construction sector also continued to fall to a new low, some 61% below the peak levels.

Public sector now taking the brunt of the job cuts - It does seem, however, that a public/private dichotomy is beginning to appear. At the beginning of the downturn, the public sector was relatively immune, but this has now reversed. According to a separate survey cited by the CSO this morning, public sector employment (excluding a temporary boost from the Census last year) fell by 4.2% yoy in Q1, while private sector employment increased by 1.2%. While the job cuts in the banking sector are likely to weigh on private sector jobs, we would expect this dichotomy to continue as the fiscal consolidation plan continues to be implemented.

Commenting on today's data, IBEC chief economist Fergal O'Brien said: "The overall employment numbers in the first quarter of the year were fairly disappointing and are reflective of early retirements in the public sector and renewed weakness in the European economy. Following the increase in employment in the final quarter of last year we knew that the public sector exits would be a drag on the Q1 numbers. Jobs were also lost across a number of other sectors of the economy due to the ongoing contraction of the domestic economy sectors such as construction and the fact that external trading conditions have been tough recently.

"Despite the somewhat worse than expected Q1 numbers, however, it is positive to see that the private sector has added 13,500 jobs over the past year, while over the same period some 22,000 jobs have been lost in the public sector. We continue to see an incredible churn effect in the Irish labour market. While job creation is strong, mainly in export businesses, we are simultaneously losing large number of jobs in the more vulnerable sectors of the economy. The job losses are unlikely to be as large in the coming quarters due to the concentrated nature of the public sector retirements in the early part of this year."  

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