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News : Irish Economy Last Updated: Nov 27, 2013 - 7:55 AM


Irish Economy 2013: 58,000 jobs added in year to Q3; Self-employed rose by 28,400
By Michael Hennigan, Finfacts founder and editor
Nov 26, 2013 - 1:20 PM

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Irish Economy 2013: The Quarterly National Household Survey (QNHS) for the third quarter shows that 58,000 jobs (3.2%) were added in the 12 months to Q3 and 28,400 were classified as self-employment without employees.

The number of unemployed fell by 12.8% in the year to the third quarter, bringing the official  total number of people unemployed at 282,900.

However, about 80,000 unemployed are in public-funded back-to-work and back-to-education schemes but they are counted as employed or in education. In the QNHS, 139,000 in part-time work say they are seeking full-time employment. Net emigration by Irish nationals in 2009-2013 is at 95,000.

The rise in self-employment at a time of restricted consumer demand, is an indication of a challenging jobs market.    

The CSO said that full-time employment increased by 53,500 or 3.8% in the year to Q3 2013 while part-time employment increased by 4,500 or 1.0% over the year.

Employment increased in eight of the fourteen economic sectors over the year (excluding Not stated) and fell in six.

The largest rates of increase were recorded in the Agriculture, forestry and fishing (+29.3% or 25,100), the Accommodation and food service activities (+11.9% or 14,700) and the Professional, scientific and technical activities(+10.8% or 10,900) sectors.

The CSO said that in the case of the Agriculture, forestry and fishing sector it can be noted that estimates of employment in this sector have shown to be sensitive to sample changes over time. "Given the continued introduction of the sample based on the 2011 Census of Population as outlined in the note on the front page of this release, particular caution is warranted in the interpretation of the trend in this sector at this time."

Long term unemployment rate fell from 8.9% to 7.6% over the year and accounted for 58.4% of total employment in the third quarter compared to 59.5% a year earlier.

Survey report [pdf]

Fergal O'Brien, chief economist of IBEC said: "This is the strongest evidence yet that our great recession is well and truly behind us. Businesses are much more confident about the economic outlook and they are hiring again in large numbers. While the GDP numbers have been disappointing so far this year, the jobs trend is the best indicator of real economic activity. Right now our labour market is really humming. Almost all of the new jobs (54,000 of the 58,000) have been full-time positions and this is evidence of the renewed optimism of Irish employers."

"It is spectacular, and against all expectations that employment is growing at around 2.5%, while GDP is struggling to achieve over 1% growth. It is also very positive to see that there is a good sectoral spread in the jobs recovery. Agriculture, manufacturing, tourism and professional services/technology have been the strongest performers, but it also really encouraging to see the recovery in construction employment."

He concluded that: "The Irish economy is now clearly performing very strongly again and all the indications from employers point to a continuation of the jobs recovery in 2014."

David McNamara, economist at Davy commented - -  "Davy View: Today's labour market data are resoundingly positive. Employment was up 1.8% over the quarter in Q3 and 3.2% over the year. This marks the fastest pace of jobs growth since Q3 2007. Unemployment fell to 12.8% from 13.6% and is now at its lowest level since Q2 2009. The rise in employment was broad- based, with a 1% fall in public sector numbers not enough to offset the strong rise in other sectors of the economy. Today's data are further evidence that the Irish recovery gained momentum in Q2, and we are happy to leave our above-consensus forecasts unchanged for now.

Unemployment falls to 12.8%, lowest level since Q2 2009

Today's QNHS release was resoundingly positive. Employment growth picked up to 3.2% yoy (+58,000) from 1.8% in Q2, the fastest pace of growth since Q3 2007. Over the quarter employment was up 1.8%. Unemployment fell to 12.8% from 13.6%, the lowest level since Q2 2009. On the back of today's release, the monthly Live Register unemployment rate has been revised down to 12.6% from 13.2% for October.

The gains in employment were across the board. Of the 58,000 jobs growth on the year, industry (+10,900) and construction (+4,300) are now contributing to the recovery. Service sector jobs rose by 18,400, largely reflecting tourism (+14,700), IT (+3,800) and professional and scientific (+10,900). These gains were partially offset by falls in public sector numbers, down 1% (3,900) over the year. Full-time employment was up by 3.8% on the year and part-time jobs up by 1%.

One note of caution on interpreting the sectoral breakdown: the CSO added a health warning to the massive 25,100 increase (+29.3%) in agricultural employment over the year as the impact of the introduction of a new population sample following Census 2011. This incremental process will be complete by Q4 2013, after which time the rise in agriculture should level off. This overestimation is due to a reciprocal underestimation of agricultural employment after Census 2006.

Nevertheless, the important point to note is that as the QNHS is a 'top-down' survey questionnaire (i.e. Are you currently employed?), the headline 3.2% yoy total employment rise still stands; however, the sectoral breakdown may display some volatility until late 2014 until the new sample fully works through the annual comparison.

More importantly, today's data provide further hard evidence that the Irish economy bounced back in the second half of this year. We would expect the strong rise in employment to drive consumer spending in H2 and into 2014, so we happy to leave our above-consensus forecasts for GDP unchanged at 1% in 2013 and 2.5% in 2014. If anything, our current unemployment forecasts of 13.7% in 2013 and 12.8% in 2014 now look too pessimistic, so we would expect to revise down those estimates in our next forecast."

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