Over 100,000 out of work for first time since 1998

Unemployment rose above 100,000 in August for the first time since November 1998. But the overall trend remains positive with the economy adding 83,500 jobs in the last 12 months leaving the unemployment rate at 4.5 per cent . Marc Coleman,Economics Editor, reports.

The Quarterly National Household Survey released yesterday shows that non-nationals account for almost half the new jobs; on the other hand 64 per cent of the 8,100 increase in unemployment also came from this group.

Just under two-thirds of new jobs were created in the construction and public sectors of the economy, while the number of females in work now exceeds 60 per cent for the first time.

The rate of job creation is slowing, however, and there are strong increases in the numbers of immigrants and school leavers entering the labour force. Overall, there are now 2.18 million people in the workforce.

Director of social and demographic statistics at the Central Statistics Office Gerry O'Hanlon said that an increase in youth unemployment was the main non-seasonal cause of the unemployment rise.

"The main reason is that you have an increase in the number of school kids who didn't find jobs. It's more than just a seasonal movement." He welcomed the fact that female participation in the workforce was now in line with EU target levels. "The Lisbon target for female participation has been reached for the first time." Goodbody stockbrokers economist Dermot O'Leary said employment growth continued to be dominated by the construction industry. "Growth in public sector employment also continues to grow strongly, accounting for over a third of the gains in employment.

"Employment in the health sector grew by 10.1 per cent year-on-year, while public administration and education were also up markedly in the past year," he said.

The Construction Industry Federation welcomed yesterday's figures but senior Ibec economist Fergal O'Brien warned that the economy was becoming over-reliant on the construction sector.

"Almost one in three of the new jobs created in the past year were in this sector. A slowing housing sector could have a very significant impact on the strength of the Irish labour market in 2007," Mr O'Brien said.

However, he welcomed evidence of recovery in employment in the manufacturing sector. "Following a number of years during which about 10,000 jobs were lost annually in manufacturing, it now appears that employment in the sector has stabilised."

IIB Bank chief economist Austin Hughes noted that all sectors of the economy were employing more people than 12 months ago. While the rate of job growth had eased back, he said it was still about three times the pace of job growth being seen in the US and roughly five times the rate of job creation in the UK and Germany.