Employment expected to surpass pre-crash peak later this year

Employment in the Irish economy is expected to surpass its pre-crash peak later this year as buoyant conditions in the labour market drive more people back to work.

Central Statistics Office figures show total employment in the Republic rose to 2.2 million in the third quarter of 2017, corresponding to an annual increase of 48,100 or 2.2 per cent.

On current projections headline employment will eclipse its 2007 peak of 2.24 million in the first half of 2018, several years earlier than previously forecast.

The latest numbers are contained in the CSO’s new Labour Force Survey, which replaces the Quarterly National Household Survey as the most accurate barometer of conditions in the Irish labour market.

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As well as including some methodological changes, the survey also incorporates revised population estimates from Census 2016, which resulted in an upward revision to several key metrics, including the labour force, employment and unemployment.

Full-time employment

The new survey shows full-time employment in the economy grew by 6.9 per cent or 114,000 year on year in the third quarter of 2017, the fastest rate recorded since 1998, while part-time employment was down 13.1 per cent or 48,000.

Employment also increased in 10 of the 14 sectors of the economy in the third quarter of 2017.

The fastest-growing sectors were administrative and support services (10 per cent), education (9 per cent ) and construction (7 per cent ). However, employment employment in professional, scientific and technical activities fell by 5 per cent.

A 4.5 per cent fall in agricultural employment was also linked to the Brexit-related slide in sterling.

Headline unemployment for December was put at 6.2 per cent, down from the revised rate of 6.4 per cent in November, albeit this was higher than the 6 per cent rate recorded by the previous data series.

However, the CSO was keen to highlight the downward trend in unemployment was continuing.

It also noted the number of people classified as long-term unemployment, out of work for 12 months or more, fell by 34,000 (-34.2 per cent), bringing the total long-term unemployment to 65,500.

Labour force

The State’s labour force was put at 2.37 million, up 0.5 per cent or 10,700 on the same period 12 months previously.

“Irish employment is now closing in its previous peak levels after a prolonged period of growth,” Goodbody economist Dermot O’Leary said.

With employment close to levels of a decade earlier, it is worth assessing the shift in the composition.

He highlighted two striking changes in employment since the pre-crash era.

“Firstly, construction employment remains 45 per cent below the levels prevailing at the peak of the boom, despite a downward revision to the level of employment in this sector at that time.

“Secondly, the number of people employed in the information and communication technology (ICT) sector has increased by 35 per cent over the period,”he said.

Employers’ group Ibec said it expected that employment should reach record levels in the first half of 2018.

“While some have voiced concerns about the overall quality of jobs being created over recent years, the data released today contains little to support this narrative,” Ibec’s head of tax and fiscal policy Gerard Brady said.

“The economy is moving in the direction of full employment and this will bring a new set of policy challenges,” he said.