Numbers at work will stabilise, says ESRI
The numbers at work in the economy will stabilise this year after five consecutive years of decline, according to a report published today by the ESRI.
The prediction comes after new figures yesterday showed that the numbers in receipt of unemployment benefit fell for the seventh month in a row in January.
The welfare claimant count, which is adjusted to strip out seasonal volatility, stood at 430,000 people in January. It has been falling gradually since peaking in the summer of 2011 at just under 450,000.
The 18-month downward trend is accounted for almost entirely by lower numbers of men in receipt of welfare.
The numbers of women on jobless benefit have remained broadly stable over the past 18 months.
Men, however, remain almost twice as likely as women to be on the dole.
Yesterday’s publication from the Central Statistics Office included separate figures for the unemployment rate.
In January, 14.6 per cent of the workforce was formally jobless. This was unchanged on December and November.
The Economic and Social Research Institute’s Quarterly Economic Commentary, published this morning, paints a mixed picture for the economy in the short term.
Although the institute’s forecasters have become marginally more downbeat about the prospects for overall economic growth since its last report three months ago, they believe that the domestic economy will expand this year for the first time in half a decade.
Solid growth in investment spending will drive the recovery in the domestic economy, they believe.
Partially offsetting this will be continued contractions in consumer and public spending.
The reason the ESRI is more downbeat overall is because the forecasters believe exports will grow less strongly than previously envisaged in 2013 owing to sluggishness in the European economy.
The authors of the report said at a briefing yesterday that there is “no reason” why Ireland would not exit its EU-IMF bailout on schedule at year-end.
But Prof Joe Durkan added that it would take “decades” to reduce public debt to safe levels.
While acknowledging the Government’s achievement last year in more than meeting budget deficit targets set down under the terms of the bailout, the ESRI economists expressed concern about meeting this year’s targets.
Their prime concern is the fiscal effects of weaker overall economic growth.
They said, too, that delays in agreeing measures to control health spending more effectively are likely to mean that savings will come later rather than sooner.
This could cause further health spending overruns this year, creating an additional budget target risk.