Too early for any pats on the back about falling unemployment

Cantillon: economist points to ‘considerable skills mismatch’ in economy

The number of people on the Live Register is now at its lowest since March 2009. But while this measure of unemployment is falling, and the growth in employment appears to be accelerating, any pats on the back for the Government must be postponed for now. All but the most amnesiac of politicians will remember that March 2009 was a pretty terrible time for the Irish economy. There is a long way to go.

Although Minister of State for Business and Employment Gerald Nash gave it a mention in his data-welcoming press release, it will have escaped most people's attention that this is European Small and Medium Enterprise Week.

The initiative trips off the tongue almost as easily as the concerns of small businesses have slipped off the Government’s policy agenda in recent years – or at least that’s what groups such as small business support group and lobbyists Isme would say.

Owner-managers must be given competitive trading conditions if they are to develop their businesses and support employment growth, Isme reiterated yesterday. This means what it always means: it wants the Government to slash costs for small businesses.

Nash is right when he says SMEs often create jobs “without any fuss or headlines”. But, as the Government knows, relieving the burdens on existing companies only makes sense if those companies have a viable future in the first place.

The word "innovation" has not been added to the name of Nash's department, the Department of Jobs, Enterprise and Innovation, for nothing.

Economist David McNamara of Davy Research points to the continuation of a "considerable skills mismatch in the economy at present", as evidenced by the "stickiness" of the long-term claimant numbers.

Separately, owner-managers of businesses struggling for revenues must be open to the idea that it is they who must adapt their companies to the needs of the economy. If they don’t cuts in business-sector costs will serve as little more than a sticking plaster.

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