Unemployment falls to 6.4% as labour market improves

Unemployment has fallen to 6.4 per cent, its lowest level in almost a decade, according to the Central Statistics Office (CSO).

The latest figures show that the number of workers classified as unemployed fell by 3,300 to 141,400 in March, which equates to an annual decrease of 39,800.

Having peaked at 15.2 per cent at the height of the crash in 2012, the State’s jobless rate is now three points below the euro-area average of 9.5 per cent.

On current trends, unemployment may fall below 6 per cent this year, which is close to full employment in Ireland.

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The Economic and Social Research Institute (ESRI) has warned the economy runs the risk of overheating at this level of unemployment.

“At face value, the headline data suggest that Ireland’s recovery phase is almost complete – unemployment could be below 5 per cent by the end of 2017 at the current pace,” Davy analyst David McNamara said.

“However, a broad range of indicators suggest that the recovery has further to run – employment is still 5.4 per cent below peak and labour force participation is only now beginning to recover as net migration turns positive,” he said.

Population

Mr McNamara also said census data showing the population is 90,000 higher than previously estimated would probably lead to upward revisions to the unemployment rate.

“In short, we think the catch-up phase still has a couple of years left to run,” he said.

The CSO numbers show the unemployment rate for men was 6.9 per cent in March, down from 9.8 per cent last year, while the jobless rate for women was 5.8 per cent, down from 6.6 per cent a year ago.

The State’s youth unemployment rate was 13.9 per cent, down from 14.5 per cent in February.

Minister for Jobs Mary Mitchell O’Connor welcomed the latest drop in the State’s headline unemployment rate.

“I will continue with my department and Government to focus on creating the best possible environment to sustain and grow jobs right across Ireland so that these figures can drop further,” she said.

“Being able to earn a livelihood is all important, allowing people to take charge of their future, to make plans and to have hope and optimism,” she added.

Mariano Mamertino of recruitment website Indeed said as the labour market continued to tighten, Irish employers would find it more difficult to find suitable workers.

“A strong pipeline of talent is essential to Ireland’s continued economic growth and prosperity. Latest Indeed data shows that Ireland would be a major beneficiary of talent if Britain puts up barriers to EU workers,” he said.

Isme, the Irish Small and Medium Enterprises Association, acknowledged the fall in unemployment but expressed concern at the rising commercial rates in the SME sector, suggesting these charges were impacting potential employment growth.