Unemployment on course to dip below 6% later this year
Latest monthly figures show no let up in level of job creation across the economy
Ireland experienced its first year of positive net inward migration of 3,100 in 2016, helping to add to the labour force. Photograph: Sean Gallup/Getty Images)
Unemployment is now on course to dip below 6 per cent, close to what economists consider full employment, by the middle of this year following another monthly slide in the official jobless rate.
Central Statistics Office (CSO) data, released on Tuesday, put the State’s unemployment rate at a nine-year low of 6.6 per cent in February.
The number of workers classified as unemployed fell by 2,900 to 145,100 during the month, which equates to an annual decrease of 36,200.
The Economic and Social Research Institute (ESRI) has predicted the economy will return to full employment, or an unemployment rate of 5 per cent, by 2020. However, at the current rate of job creation this may be achieved sooner.
Davy analyst Conall Mac Coille said he now expected unemployment to fall to below 6 per cent by the middle of this year.
“Our forecast for Ireland’s unemployment rate to average 6.7 per cent through 2017 now appears too pessimistic,” he said.
Mr Mac Coille said returning migrants and low participation rates suggest that there is still slack in the labour market.
He said net emigration had flattered Ireland’s unemployment rate in the past. “Unemployment would have been higher had Ireland not seen net outward migration of 155,000 through 2010 to 2015.”
However, he said Ireland experienced its first year of positive net inward migration of 3,100 in 2016, helping to add to the labour force.
“Returning migrants should push up the labour force participation rate, helping to curb the decline in the unemployment rate as jobs growth is sustained,” he said.
The latest figures show the unemployment rate for men stood at 7.1 per cent, down from 7.3 per cent the previous month, and 9.9 per cent in February 2016.
The jobless rate for women, meanwhile, was 5.9 per cent, down from 6 per cent in January and 6.5 per cent in February last year.
The State’s youth unemployment rate was 14.5 per cent in February, down from 15.1 per cent the previous month.
“It’s very positive news that 36,000 fewer people were unemployed in February compared to a year ago,” Minister for Jobs Mary Mitchell O’Connor said. “These are real people’s lives being transformed,” she added.
IDA chief executive Martin Shanahan said: “While this trend is very welcome, we shouldn’t take it for granted – we need to continue to focus on our competitiveness.”
Recrutiment website Indeed, meanwhile, highlighted the top 10 roles being sought by employers in Ireland, which included sales managers; nurses; software engineers/ developers; and accountants and auditors.
The group’s economist, Mariano Mamertino, said: “As Ireland‘s unemployment falls, employers will find it increasingly difficult to source suitable candidates to fill their open roles. Companies must develop smart ways of finding this talent or face missing out on growth.”