Unemployment falls to post-crash low of 7.8%

Unemployment has fallen to a new post-crash low of 7.8 per cent as conditions in the jobs market continue to improve.

The latest official figures show the number of workers classified as unemployed fell by 1,500 to 169,700 in May.

This equated to an annual decrease of 38,300 or 1.8 per cent.

The State’s headline rate of unemployment now stands at an eight-year low of 7.8 per cent, a level not seen since October 2008.

The figures also showed that youth unemployment, which stood at 20.8 per cent just 12 months ago, has fallen to 15 per cent.

At the height of the financial crisis in 2012 , youth unemployment, considered by many as the most enduring legacy of the crash, reached 31.3 per cent in Ireland.

Having had one of the highest jobless rates in Europe only a few years ago, Ireland’s unemployment rate is now well below the euro zone average of 10.2 per cent.

Net outward migration, which previously hid the true extent of unemployment, is expected to cease this year with a return to inward migration from 2017 onwards.

The CSO’s unemployment estimates are based on the Live Register and the Quarterly National Household Survey, which recorded another spurt in employment growth in the first quarter of 2016.

There was an average increase in the numbers at work last year of 50,100, up from 32,800 in 2014. Merrion Stockbrokers is another net rise of around 44,000 in 2016.

Merrion economist Alan McQuaid said consecutive gains in employment had now been posted in the past three years. He said it was hard to disagree with the Department of Finance’s projection that Ireland will pass the two million people in employment mark later this year and replace all of the jobs lost during the downturn by 2018.

On foot of the new estimates, Davy revised its unemployment forecast for 2016 down to 7.5-8 per cent.

“Overall, the labour market recovery looks to have maintained its momentum in Q2, following the 2.4 per cent rise in employment in the first quarter,” Davy analyst David McNamara said, noting growth had been broadly based across most sectors.

“A Brexit vote knocking confidence and investment is one potential headwind in the near term, while the long-term effects of a Brexit would hit indigenous firms hardest,” he said. Isme, the Irish Small and Medium Enterprises Association, welcomed the continuing reduction in the unemployment rate.

Chief executive Mark Fielding said: “While the figures are welcome, we cannot be complacent as there are a number of pressures threatening business competitiveness.”

“Foremost among these are wage demands, lack of access to finance, increased business costs, including insurance hikes of 30 per cent plus and the lack of job-creating investment in infrastructure,” he said.

The figures show the number of males categorised as unemployed in May was 109,200, down 1,600 on the previous month, while the number of females unemployed was unchanged at 60,400.