Jobless figures add to signs of recovery

FURTHER TENTATIVE signs of economic recovery emerged yesterday with the publication of data showing growth in consumer activity and a levelling off in numbers signing on the Live Register.

Retail sales in March rose by 2.6 per cent over February, according to the Central Statistics Office. That marked a 3.6 per cent gain year on year. The figures mean that retail sales, which include motor sales, in the first quarter of 2010 were higher than the year-ago period for the first time since late 2007.

While the growth was driven primarily by car sales, which have been boosted by the scrappage scheme, analysts noted that core retail sales remained robust, experiencing a third consecutive monthly rise in volumes.

Nonetheless, the motor trade experienced the most significant increase in sales, with car sales rising by 21.9 per cent in the year.

In value terms, the picture was less positive for retailers with the value of retail sales falling by 1.6 per cent in March 2010 compared to March 2009, although there was a monthly increase of 2.2 per cent. Excluding the motor trade, the annual decrease was 5.3 per cent, while the monthly change was up 0.7 per cent.

Separate figures also published yesterday show the number of people on the Live Register decreased slightly in April, signalling a possible stabilisation of the unemployment rate.

Seasonally adjusted figures reveal the number of people signing on fell by 500 in April to stand at 432,500.

On an unadjusted basis, there were 2,464 fewer people on the Live Register than in March.

The estimated unemployment rate was unchanged at 13.4 per cent.

While annual comparisons show that 50,781 more people claimed unemployment benefit in April this year than in the same month last year, that figure is also better than the comparative numbers for February and March – of 84,500 and 65,900 respectively.

IBEC senior economist Fergal O’Brien said the indicators show the economy is “now almost certainly expanding again”.

“Consumer confidence has clearly strengthened since December’s budget and consumers are now most likely saving a lower percentage of income than at the end of last year.” He said that while the stabilisation in the labour market was welcome, unemployment remained a daunting problem for Government.

Alan McQuaid of Bloxham said the figures were “quite positive”. Ireland could return to positive growth sooner than was expected at the start of the year, although he warned of the potential impact of the euro zone debt crisis.

Retail Excellence Ireland, which represents the retail sector, said the figures provide a strong indication that like-for-like growth is likely to be reported in the second quarter. Chief executive David Fitzsimons said that, following a prolonged two-year period of rapidly deteriorating retail sales, the industry is now experiencing “more modified decline”, with many many operators believing the industry has reached the bottom.

Responding to the Live Register figures, Labour Party employment spokesman Willie Penrose said the figures held no sign of an economic recovery and would have been higher but for renewed emigration. “Unemployment at this level should not be acceptable in any civilised society.” Mr Penrose also criticised the Government’s policy on job creation.

His view was echoed by the Small Firms Association, which called for more Government action on unemployment.