Employment rate falls by 8%

The number of people in employment fell by 8.1 per cent in 2009, according to new figures from the Central Statistics Office (CSO), bringing the unemployment rate to 13.1 per cent for the last quarter of last year.

The latest quarterly national household survey shows there were 1,887,700 persons in employment during the fourth quarter, an annual decrease of 166,900.

This compares with an annual decrease in employment of 8.8 per cent in the third quarter and 3.9 per cent in the year to the fourth quarter of 2008.

The data shows the unemployment rate moved up to 13.1 per cent in the last three months of last year, compared with 12.5 per cent in the previous quarter.

According to the figures, there was an annual decrease of 127,200 or 11.1 per cent in the number of men in employment in the fourth quarter, while the number of women working fell by 39,600 or 4.3 per cent.

Full-time employment fell by 193,200 on an annual basis with was an increase of 26,400 in the numbers employed part-time.

Employment fell on an annual basis in nine of the 14 economic sectors with the largest decline recorded in the construction sector where the numbers employed fell by 79,600, or 36.8 per cent over the year.

More than 60 per cent of the fall in male employment is attributable to the decline in the number of males employed in the construction sector, the figures show.

The next largest annual decrease in employment was recorded in the industry sector where the numbers employed fell by 29,800 or 10.8 per cent.

The number of people unemployed in the final quarter of 2009 increased to more than 267,000 over the year, up 57.6 per cent.

An additional 189,100 males and 78,400 females became unemployed last year, the data shows.

In the fourth quarter, the number of unemployed males increased by 72,000 or 61.5 per cent while the number of women without employment rose by 25,800 or 49 per cent.

On a seasonally adjusted basis the number of persons unemployed increased by 10,100 between the third and fourth quarter.

The overall employment rate among persons aged 15-64 fell by 4.9 percentage points to 61.1 per cent.

Employment rates fell across all age groups but the largest decrease was recorded for those aged 20-24 with a 9 per cent decline over the year.

The total number of people in the labour force in the fourth quarter was 2,155,200, representing a decrease of 69,100 or 3.1 per cent over the year.

This compares with an annual labour force decline of 0.7 per cent or 15,500 in the final quarter of 2008. The overall participation rate declined from 62.9 per cent to 61.2 per cent in the year to the fourth quarter of 2009.

Commenting on the latest data, Rossa White of Davy Stockbrokers said the figures show the labour market has begun to stablilise and forecast taht the unemployment rate would peak at around 13.5 per cent this summer.

Brian Devine, economist with NCB Stockbrokers said the data does little to change the view that there will be no net job creation until 2011.

"We expect the peak to trough decline in employment to be 14 per cent with 11.9 per cent of that adjustment having taken place," he said.

Elsehwere, Alan McQuaid, chief economist with Bloxham Stockbrokers warned that Ireland will not see the jobless rate returning to the 4 per cent level again unless major policy initiatives are taken to 'up-skill' a significant part of the workforce and there is a reduction in the minimum wage level.

"It looks like there will be a high level of unskilled workers permanently on the dole queues even when the Irish economy eventually returns to positive growth," he said.

"Even when the economy returns to 'normal' we think the permanent jobless rate won't drop below 7 per cent to 8 per cent, Mr McQuaid added.

Ibec said the figures highlight the scale of the challenge facing the new Cabinet.

"The significant increase in long-term unemployment is one of the biggest challenges facing the Government. The new cabinet must put jobs and economic renewal at the very top of its agenda," said Ibec senior economist Fergal O'Brien.

"The continued rise in the long-term unemployment rate and the fall in those classified as short-term unemployed suggests an emerging structural unemployment problem.Those previously employed in construction or traditional manufacturing are struggling to obtain new jobs in other sectors of the economy," he added.