Employment surpasses pre-crash peak as jobless rate sinks to 5.3%

CSO data shows that statistically all jobs lost during downturn have now been recovered

“With the economy approaching full employment the biggest challenge facing the Irish labour market will be finding workers to fill vacancies,” Ibec economist Alison Wrynn said. Photograph:  Cyril Byrne

“With the economy approaching full employment the biggest challenge facing the Irish labour market will be finding workers to fill vacancies,” Ibec economist Alison Wrynn said. Photograph: Cyril Byrne

 

The number of people employed in the Irish economy has eclipsed its pre-crash peak, marking a major milestone for the State, while the Republic’s jobless rate has been revised down to 5.3 per cent, its lowest level in 10 years.

The figures, contained in the Central Statistics Office’s latest Labour Force Survey, show total employment in the Irish economy rose to 2.237 million in the first quarter of 2018. This was marginally above the boom-time high recorded in the final quarter of 2007, which means that statistically all the jobs lost during the downturn have now been recovered.

However, the CSO cautioned that the State has a bigger population and a larger workforce than in 2007 and that the employment rate - the proportion of adults with jobs – is still below the pre-crash level.

Nonetheless, the CSO figures indicate the economy has recorded 23 consecutive quarters of employment growth since 2012.

The latest survey also revised the State’s headline rate of unemployment for May down to 5.3 per cent, from 5.8 per cent, the lowest level recorded since 2008.

Signs of overheating

Full employment in the Irish economy equates to a jobless rate of roughly 5 per cent, according to Economic and Social Research Institute (ESRI), which this week warned that signs of overheating were beginning to emerge in the Irish economy.

The CSO’s survey, which replaces the Quarterly National Household Survey as the main indicator of trends in the Irish labour market, shows that overall employment grew by 2.9 per cent or 62,100 in the year to the first quarter of 2018.

Employment increased in 11 of the 14 sectors of the economy during the year with public administration (+11.8 per cent ) and construction (+9.9 per cent ) witnessing the largest annual increases.

Employment in construction continues to be one of the key drivers of recovery in the Irish labour market with overall employment in the sector rising to 137,700, an increase of 12,400 in the year.

The CSO also noted there was an increase in full-time employment of 72,000 in the year to the first quarter and a corresponding decrease in part-time employment of 9,900.

Unemployment

Unemployment, meanwhile, fell by 30,500 or 18.6 per cent to 132,900, resulting in a headline jobless rate of 5.8 per cent at the end of the first quarter.

“In absolute terms, the number of people at work has finally surpassed the 2008 peak at 2.22 million, but the employment and participation rates are still well below peak,” Davy analyst David McNamara said.

Employers’ group Ibec said the latest figures provided further evidence of the strong momentum in the economy

“With the economy approaching full employment the biggest challenge facing the Irish labour market will be finding workers to fill vacancies,” Ibec economist Alison Wrynn said.

“Feedback from Ibec member companies suggests that firms are now finding it increasingly difficult to attract and retain talent. In the past, we were able to overcome these challenges by attracting both Irish and foreign workers living abroad,” she added.