Irish unemployment falls below 200k, unemployment rate at 8.9%

The pace at which Irish employment collapsed during the recession surprised everyone, and now the pace of jobs growth is also much more rapid than generally envisaged  a few years ago. Seasonally adjusted employment grew by 29k during 2014  and has picked up momentum in 2015,  rising by 43k over the first three quarters of this year. That takes the total increase over the past three years to 140k,  leaving total employment in the third quarter of 2015 at 1.98 million and  2.9% above the figure a year earlier.

Most industries have seen employment grow over the past year, notably manufacturing (+14k) and construction (+15k), with the latter total now at 127k from a cycle low of 96k, although still  a long way from the cyclical peak of 274k. Financial services saw one of the few declines, alongside retail, but the general picture is of an economy in which  the growth of domestic spending is translating into  robust demand for labour,

The labour force   is also responding to the changed environment, and although broadly flat in the third quarter has risen by some 13k over the past year. That was dwarfed by the annual  rise in employment (56k) so the numbers unemployed fell  by 43k  and by a seasonally adjusted 9k in the quarter. That left the total unemployment figure  at 197k, the first sub-200k reading since the  final quarter of 2008.

The  CSO estimated the unemployment rate in q3 at 9.1% , again the lowest in seven years. Moreover, the initial monthly estimated unemployment rate for the quarter had been put at 9.5% and has consequently been revised lower, leaving the October estimate at 8.9% from the initial 9.3%.

The Irish economy , as captured by real GDP, actually bottomed out in the final quarter of 2009 and recent data revisions show that it grew in every subsequent year, albeit marginally in some cases. Yet the general public  did not perceive a recovery ,in part due to the absence of employment creation. That has well and truly arrived and the tightening labour market is likely to generate general upward pressure on wages, which is already appearing in certain sectors of the economy.

 

 

Published by

Dan McLaughlin

Economics Lecturer and Commentator