Jobless rise a reflection of housing fall-off

The implosion of the housing boom led to another increase in the number of people claiming unemployment benefit in December, pushing the rate of unemployment up to 4.7 per cent. Laura Slatteryreports.

New figures from the Central Statistics Office (CSO) show that an additional 2,100 people signed on in December, after a 5,000 increase in claimants in November.

The rise in the jobless total was heavily skewed toward male workers - with 1,900 new male claimants - suggesting that more construction firms laid off workers as the Christmas break approached.

Economists expect there will be a sharper jump in the numbers on the Live Register in January as building sites failed to re-employ workers in the new year.

With the economy starting to slow down, the number of people on the Live Register jumped by 10 per cent in 2007 to 171,800, with men accounting for 94 per cent of this increase.

But the 15,100 rise in people claiming the Jobseekers Benefit and Allowance payments was also geographically unbalanced, with the Border, Midland and Western region disproportionately affected, Goodbody Stockbrokers economist Dermot O'Leary noted.

Some 36 per cent of the increase in claimants occurred in this region, which accounts for just 26 per cent of the total labour force.

When not adjusted for normal seasonal factors, such as people returning home for Christmas and signing on, the total number of unemployment benefit claimants actually rose by 8,700 in December.

Responding to the CSO data, Davy Research said it expected many workers in the stagnating housing market would be joining the dole queues in January, while Fergal O'Brien, economist at employers' group Ibec, said it was "inevitable" the housing slowdown would lead to job losses.

The Live Register is not a direct measure of unemployment, as it includes some people who are working casually or part-time but still qualify for Jobseekers' supports.

But based on the figures, the CSO said the unemployment rate was now 4.7 per cent, up from 4.6 per cent in November and 4.4 per cent in its last official measure in the Quarterly National Household Survey.

The Government expects the unemployment rate to rise to 5.5 per cent this year as the economy loses more steam, but the number of people employed is also expected to grow as the labour force expands due to immigration.

Opposition politicians yesterday criticised the Government for its handling of the economic downturn. Fine Gael employment spokesman Leo Varadkar said Government policies had caused competitiveness to plummet, while Labour employment spokesman Willie Penrose said better retraining opportunities were needed for those who lose jobs in construction and the struggling manufacturing sector.