Recession over, recovery under way? Jobs rise suggests answer may be yes
Analysis:Fewer industries are shedding workers and more are starting to hire
Is the recession over and real recovery under way?
Yesterday’s quarterly employment and unemployment numbers for the end of last year, along with the more timely monthly data on the jobless claimant count for February, suggest something approaching a tangible rebound is finally taking hold.
These two sets of numbers are probably the most encouraging economic news in half a decade.
Although by no means universally good, yesterday’s figures show that most of the headline jobs figures are starting to point in the right direction.
Most important of all is the number of jobs in the economy. Following collapse in 2009, a sharp fall in 2010 and a more gradual decline in the period to the first half of last year, the economy finally began generating jobs in the second half of 2012.
The seasonally adjusted figures show that in the six months to the final quarter of last year, there was a net increase in employment of close to 10,000 (and the unadjusted figures show a net increase of nearly 25,000 over a more extended period of nine months).
Such numbers are, of course, a mere drop in the bucket when the scale of past job losses are considered (almost one-third of a million since the bubble-era peak). But recovery has to start somewhere. It looks as if it started in the second half of last year.
Looking at employment by sector, fewer industries are shedding labour and more are starting to hire. Of the 14 sectors for which the statisticians provide figures, only four recorded quarter-on-quarter declines in employment in the final three months of last year. Two years earlier 11 were contracting.
The balance between growing sectors and shrinking sectors has been gradually shifting towards the former.
As encouraging again are the kinds of jobs that are being created. Sectors that generate sustainable and/or well-paid employment are doing best.
Technology sector peak
The technology sector, which has grown throughout the crisis, reached a new all-time peak of 84,000 jobs at the end of last year. The “scientific and professional” category registered four consecutive quarters of growth to employ 103,000 by the end of 2012. The big increases in agricultural output in recent years have finally started feeding into job creation – net employment in the sector expanded by almost 10,000 in just 12 months.
The shift from wholesale job destruction to modest job creation is also starting to reduce the numbers out of work.
By the standard international measures, just over 300,000 people were unemployed at the end of last year, down by 22,000 on the first quarter of the year, when joblessness peaked.
Another set of figures released separately by the Central Statistics Office show the decline in joblessness continued into this year.
But the rate of unemployment – at just over 14 per cent this month – remains one of the highest in Europe. It will take a very long time even to push it into single digits.
If yesterday’s figures provided more reason for hope than any other development since the crash, they were very far from signalling that everyone is seeing their lot improve.
Youth employment shrinks
Most depressing was the continued contraction in youth employment. All the jobs growth recorded in the second half of last year was among those aged 35 and over. The numbers at work under 35 continued to shrink.
Although it is not possible to work out the numbers moving out of and into the State using yesterday’s data, the population of 20-24-year-olds fell by more than 5 per cent in the 12 months to the final quarter of the year. There is no doubt that many thousands of young people are quietly giving up on Ireland and moving elsewhere.
The only thing more surprising than the general social calm that has accompanied the past half-decade of depression has been the quiescence of the young who continue to suffer disproportionately.
If that is depressing, trends in the health sector are puzzling.
While the headcount in the public sector has been falling, yesterday’s figures showed that the health sector – the economy’s second-biggest employer and one which is public-sector dominated – continued to take on more people during 2012, just as it has throughout the entire recessionary period. By the final quarter of last year it was employing a new record high number of people: 245,000.
The suspicion lingers that those formally moving off the public sector payroll are returning as contract workers. If they are being paid from the public purse it is little wonder that the Department of Health, for which James Reilly has ministerial responsibility, is raising the ire of the troika for failing to stick to budget targets.