Unemployment rate hits five-year low of 11.5%

Latest CSO figures show number of claimants on Live Register dropped by 3,400 in July

The number of people signing on the Live Register fell again this month as conditions in the labour market continue to improve.

The latest set of figures from the Central Statistics Office (CSO) showed the number of claimants on the register dropped by 3,400 in July, the 25th consecutive monthly drop.

As a result, the seasonally adjusted register, which includes casual and part-time workers as well as those on Jobseeker’s Allowance, stood at 382,800 at the end of July, its lowest level since April 2009.

On an unadjusted basis, this represents an annual decrease of 37,461 or 8.5 per cent.

The updated figures gave rise to a standardised measure of unemployment of 11.5 per cent, down from 11.6 per cent the previous month.

Unemployment as measured by the more accurate Quarterly National Household Survey put the rate at 12 per cent in the first quarter of this year.

The number of long-term unemployed on the register - those claiming for over 12 months - stood 188,670, representing an 46.6 per cent of the total.

The CSO noted that the number of people on job activation programmes, which primarily target long-term unemployed people, stood at 65,709 in June this year, down from 66,564 (-1.3 per cent) on the same period last year.

People on activation programmes are not included in the overall Live Register numbers.

The persistent decline in the register in the past two years is in part linked to rising emigration and a return to education by those previously in the labour market.

The latest numbers indicate the ratio of over-25s to under-25s on the register increased once more in July to 5.75:1, having stood at 5.44:1 at the end of last year.

Minister for Jobs Richard Bruton described the figures as “very encouraging”, noting the reduction in unemployment in the last 12 months was more than double the previous 12 months, sugesting recovery was having “greater traction”.

However, Mr Bruton acknowledged that having an unemployment rate of 11.5 per cent was still unacceptable.

Investec economist Philip O’Sullivan said: “All in all, there is a familiar feel to this release, with many of the same trends we have noted for the past 18 months or so remaining intact - while the improvement in the Irish economy is creating more opportunities for people to find work, the rising tide has so far failed to lift all boats, with significant challenges in terms of youth and long-term unemployment remaining.”

The Irish Small and Medium-sized Enterprise Association, however, said it was underwhelmed by the figures and criticised the Government’s efforts to increase employment.

Chief executive Mark Fielding said the latest Central Bank forecast for 2014 unemployment is predicting a modest decline in the live register to 11.4 per cent this year.

“ This will mean that growth for 2014, the Governments well-publicised ‘year for jobs’, will have been slower than 2013. This slow growth is unsurprising given the lack of Government intervention in the area.”

“The current administration’s refusal to tackle areas such as high energy costs, transport costs and the social welfare trap is severely restricting growth potential. Their lacklustre approach to labour force activation leaves much to be desired,” he added.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times