Brexit nerves fail to dampen job-creation momentum

The latest Irish jobs figures are strong and show that any nervousness among consumers and businesses which emerged after the Brexit vote did not hit the employment market in the second half of last year.

The annual rise in total employment of 65,100 last year was a 3.3 per cent increase – equalling the fastest pace since the jobs recovery started – and shows that the jobs market entered 2017 with strong momentum.

The figures show strength across the board, with increases in every sector and a big rise in full-time employment of 72,000. The numbers in part-time employment fell – presumably partly because companies are moving some staff from part-time to full-time.

Davy stockbrokers said in a note on the figures that the unemployment rate could fall towards 6 per cent this year – and the numbers coming here to seek work now exceed those leaving.

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The two biggest increases were construction, where jobs numbers rose by 11,600, or 9.2 per cent and professional, scientific and technical activities, where there was a 5.7 per cent rise. This shows that the construction sector continues to bounce back from the catastrophic job losses of the crash. Meanwhile the professional, scientific and technical category covers the fast-growing professional services sector as well as more technical staff.

Biggest gainers

Elsewhere, the public sector is back hiring, with rises in health and education, and the IT and accommodation and food services were also among the biggest gainers.

Taking a longer-term view, we have regained around two-thirds of the job losses sustained in the great economic crash – though, of course, we now know that the economy then was on shaky foundations, and in particular the construction sector was bloated.

Employment levels peaked at 2.169 million in 2007, and dropped to a low of 1.825 million in 2012. The number in work is now 2.048 million and could approach 2.1 million again this year if the momentum we are now seeing is maintained.

The outlook over the next couple of years is surrounded by significant uncertainty. The Brexit talks have not yet even been triggered, never mind the event happening itself. The tax policies of the Trump presidency could also affect inward investment.

Confidence

Neither of these risks look likely to hit in the months ahead, though if there is a big row as the Brexit talks start this could hit confidence. There are also some signs of big US companies holding off investment plans to see what the Trump presidency brings – though others continue to proceed.

So in the short term the trend of rising employment should continue. In turn this will support the public finances. The Brexit hit remains unpredictable – and still a way off – and one of the”unknown unknowns” is how the start of the serious talks will hit economic confidence both in Britain and here.