Unemployment level falls below 10%

Unemployment level falls below 10%

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JobsIbec has said new CSO figures showing employment has fallen into single digits for the first time in eight years highlight the strong positive momentum in the economy.

However, labour market challenges remain the business group has warned.

The Quarterly National Household Survey, the official recording of the labour force, shows that 41,300 jobs were created in the last twelve months, an increase on the 29,100 created in the year to December 2014. There are still 212,800 people unemployed although the seasonally adjusted unemployment rate reduced to 9.9% and 59.8% of these are long-term claimants.

Commenting on the CSO’s latest Quarterly National Household Survey, Ibec Senior Economist Gerard Brady said: “The jobs market still provides our best indicator of how the economy is performing. On that basis it is clear that recovery is beginning to gain traction right across the economy with employment growth in ten out of fourteen sectors. Importantly the employment is of good quality with full-time employment rising by 52,100 (3.6%) and part-time employment falling.”

“Labour market trends over recent quarters are consistent with our view that unemployment will fall below 9% by the end of 2015. Notably, if current momentum is sustained short-term unemployment could fall back to pre-crisis levels within 12 months. On the other hand long-term unemployment will continue to be a major challenge. In this context strong growth in construction employment (up 19,500 annually) is welcome.

“Over the short-term the normalisation of construction employment will go some way to reducing long-term unemployment. Ibec’s recent regional skills fora, however, have highlighted that reducing unemployment in the regions in particular will require greater collaboration between business and education providers over the coming years,” added Mr. Brady.

Reacting to today’s Quarterly National Household Survey results, ISME, the Irish Small & Medium Enterprises Association, expressed concern at the continued rise in costs for SMEs who are trying to create jobs.

The Association called for a renewed focus on cost reduction and warned that with 9.9% of the workforce still seeking jobs and SMEs still struggling out of recession, “now is not the time for stupid wage promises”.

The Director of the Small Firms Association, Patricia Callan has welcomed the continuing downward trend in the unemployment figures.

“The key decision in whether a business hires someone is whether they will have the money to pay the wages at the end of the month.  Affordable wage levels for all is more desirable than fantasy hikes for the few who the trade union movement represent, which will only result in others being locked out of employment.  With almost zero inflation, there are no grounds for any increase in minimum wage or in wages generally across the economy this year.  Where wage increases take place, they must make sense in the context of productivity gains from workers which lead to additional business growth.  Otherwise, we are being foolhardy in risking our future economic growth,” she said.

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