The jobs market is proving remarkably resilient. Against a background of a fairly severe international economic slowdown, total employment has actually risen over the past year by 28,400.
Much of the increase is due to higher part-time employment and to a rise in public sector job numbers which is not likely to continue due to the restrictions imposed in the Budget. However the performance of the jobs market is nonetheless encouraging, with additional employment in construction, hotels and restaurants and a surprisingly small decline in manufacturing employment.
The quarterly national household survey from the Central Statistics Office is one of the most timely and important of economic indicators. With various statistical quirks affecting the different measures of national income, the number of people in employment is one of the most transparent statistics and one that provides a real measure of how the economy is performing.
Given the difficulties facing exporters in the early part of this year and the poor conditions on international markets, some fall-off in employment levels might have been expected. This suggests that the overall impact of the slowdown on jobs may not be as bad as had been feared.
It is too early, however, to conclude that the worst is over for the jobs market, particularly given the string of job loss announcements of recent months. The evidence of international recovery remains tentative and the speed of the likely upturn uncertain. In any event, unemployment is probably set to rise further, as the number of new jobs created is unlikely to match the growth in the labour force for some time yet.
All this means that the Government should not use the latest figures as an excuse for complacency. It is essential that everything possible is done to rebuild the competitive losses of recent years. In the short term this means avoiding a budget package which significantly pushes up inflation. It will be tempting for the Government to hike up excise duties to raise revenue, but if this is reflected in higher pay demands in next year's negotiations for the second period of the national programme, then the price will be paid in job losses.
In the longer term a range of issues affecting competitiveness need to be addressed, ranging from efficiency in the delivery of public services to the need to bolster competition and invest in infrastructure. The Government will be quietly relieved at the latest figures. But unless it addresses the key competitive issues in a determined way, the economy will not be in a position to deliver sustained jobs growth in the years ahead.