High business costs hindering job creation, says Isme chief

Emigration seen as a factor in continued drop in jobless rate to 13.7%

Paul van Riel, chief executive of Dutch multinational Fugro, with Minister for Social Protection Joan Burton and Barry O’Leary, IDA chief executive. Photograph: Kenneth O’Halloran

Paul van Riel, chief executive of Dutch multinational Fugro, with Minister for Social Protection Joan Burton and Barry O’Leary, IDA chief executive. Photograph: Kenneth O’Halloran

 


While the number of people out of work decreased during the second quarter of this year, the seasonally adjusted unemployment rate remains at a “stubbornly high” 13.7 per cent, according to Isme chief executive Mark Fielding.

The latest figures from the Central Statistics Office show 300,700 were unemployed in the second quarter of this year, with the numbers out of work for more than 12 months accounting for 58 per cent of this figure.

Mr Fielding said excessive business costs were making it too expensive for small and medium-sized enterprises to hire, with the number of self-employed people with paid employees declining in the quarter and over the past 12 months. “No amount of spinning by the Taoiseach and Ministers will alter the fact that the private sector, the engine of the economy, will not create jobs while their costs are too high,” he said.

The number at work jumped by almost 34,000 in the 12 months to June, according to the Central Statistics Office, while the rate of unemployment declined by 6.9 per cent or 22,200 during the same period.


‘Positive’
Merrion Stockbrokers chief economist Alan McQuaid said the latest labour market figures were “very positive”, with employment rising in nine of the 14 economic sectors on an annual basis.

He said the Government would take some solace from the fact employment had increased for three quarters in a row on an annual basis, but cautioned that emigration was playing a big part in keeping down the numbers unemployed.

Data published by the CSO yesterday showed an increase in Irish people emigrating from 25,900 to 35,200 in the 12 months to April. The bulk of the rise is accounted for by an increase in emigration among the 15-24-year-old age group.

“This confirms the above-average fall in the Live Register numbers in this age group as attributable to the rise in emigration,” Davy economist David McNamara said.

KBC Bank chief economist Austin Hughes said it must also be remembered that the improvement in employment occurred in the face of an ongoing reduction in employment in the public sector.

The number of employees in the public sector declined by 5,400 or 1.4 per cent in the 12 months to June and by 31,600 or 7.7 per cent since 2010.


‘Strong’
However, he said the data was “surprisingly strong” not only in terms of the pace of employment growth they reveal but also in its composition. Sectors such as industry and construction that bore the brunt of the downturn both reported year on year and quarter on quarter gains in the spring of 2013.

The Construction Industry Federation welcomed the significant increase in construction employment revealed in the Quarterly National Household Survey, which was the largest quarter on quarter increase since 2006.

Direct construction employment rose by 6,400 in the second quarter of 2013, from 96,300 to 102,700.

“Our hope is that this upward trend will be driven by further activity in the sector in the coming months,” CIF director general Tom Parlon said.