THE IRISH ECONOMY continued to create jobs at a rate of more than 1,000 per week in the three months immediately following June’s shock Brexit vote, defying some of the most pessimistic predictions about the short-term impact.
According to today’s figures from the Central Statistics Office, 57,500 jobs were created this year to the end of September, signalling robust annual job growth of 2.9%.
The pace of job growth moderated slightly to a seasonally adjusted 13,500 during the most recent three month period, down from 18,900 and 16,100 in each of the first two quarters of this year, respectively. This brought the total number employed to 2,040,500, the highest since the end of 2008, although still 6% below the all-time high of 2,169,600, reached in Q3 2007.
Public sector employment up, despite industrial unease
At a time of increasing industrial unease in the public sector, the small print in today’s figures reveals that by the middle of this year, total public sector employment was 384,700, up 8,500 on a year earlier.
This represents a 12,800 increase on the post-crisis low of 371,900 reached in the third quarter of 2014, but is still 10% below its end-2008 peak of 427,300. These figures include employees of semi-state bodies, but exclude temporary field staff taken on for the 2016 Census.
Although more than three quarters of jobs created over the past year were full-time posts, the total number of part-time jobs stayed close to the 461,900 record reached in the middle of this year, while the number of those in part-time jobs by choice – i.e. not underemployed – has reached a new all-time record of 361,200.
Seasonally adjusted unemployment continues to fall
Continued strong job growth, among other factors, has brought the seasonally adjusted unemployment rate down to 7.9%, with 25,300 removed from the ranks of the unemployed over the course of the year.
The number of unemployed now stands at 177,700, the lowest since the end of 2008. The number unemployed for longer than one year also continues to fall, reaching 92,300, or just over half of the total.
Over the course of the year, the long-term unemployment rate fell from 5.0% to 4.2%. The reduction has been particularly marked among males unemployed for more than one year, which fell by 12,100 over the course of the year to stand at 63,600, compared to 28,800 women who are long-term unemployed.
Majority of economic sectors are growing
This picture is consistent with job growth across 12 of the 14 economic sectors, with particular strength seen in Accommodation & Food Service Activities (+9.6% or 13,400) and Construction (+7.3% or 9,300). The only sectors to show modest declines over the year were Administrative and Support Activities and Public Administration and Defence.
Growth in the size of the labour force is also picking up, growing by an annual rate of 1.5%, or 32,200, to reach 2,218,200 by the end of September. This is more than double the 0.6%, or 13,500, increase seen in the previous twelve months.
The CSO attributes this acceleration to a number of factors, including changes to the working age population and inward migration, which together caused the demographic effect to turn positive in early 2016 for the first time since late 2009.
Participation in labour market is increasing
The number of people opting out of the labour market remained relatively static, increasingly only modestly by 0.2% to 1,430,300 over the course of the year. Overall, the participation rate continues to edge up from its post-crisis lows, particularly among young males.
These developments bode well for the economy’s underlying growth potential over the coming years if this momentum can be maintained.
Employment numbers are what economists call a ‘lagging indicator’ – not only is the Quarterly National Household Survey published nearly two months after the end of the period being measured, but changes in the economy tend to be reflected later in the jobs numbers later than in sales, production or consumer confidence data, for example.
These numbers nonetheless give the best available snapshot of the health of the labour market, with sectoral breakdowns and other measures that do not appear in the monthly live register figures, for example.
No time for complacency
Overall, these latest jobs numbers are certainly encouraging, but the slowdown in the pace of job growth as 2016 progressed, coupled with the fact that any negative impact from Brexit – let alone a Trump presidency – is unlikely to be felt for some time, suggest there is no reason for complacency in the drive for full employment.
Victor Duggan is an economist and public policy expert, having worked in the OECD, World Bank, European Commission, European Investment Fund and the Irish Labour Party, as well as in the private sector.