Employment reaches record high after stronger than normal first quarter

The number of people in employment reached a record high in the first quarter of 2019, the latest labour force survey by the Central Statistics Office shows.

A stronger than normal rate of first-quarter growth prompted downward revisions to the estimated unemployment rates for March and April.

Employment in the State surged 3.7 per cent in the first quarter to just above 2.3 million compared to the same quarter the year before.

When seasonally adjusted, the numbers employed grew 1.5 per cent to 2,316,000, a record since this measure began in 1998 and a record overall given the expansion of the population and labour force size.

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"It has never been higher than that," said CSO senior statistician Edel Flannery.

While the rate of employment hasn’t reached the record seen during the economic boom, “in absolute numbers, we have”, Dr Flannery added.

The number of women in employment expanded by 5 per cent to 1,064,400, while male employment rose 2.5 per cent over the year to 1,237,500. By sector, the largest rates of increase were in transport and storage, and administration and support services.

The last time there was no quarterly growth in employment was in the third quarter of 2012, the CSO said.

Davy Research chief economist Conall Mac Coille said the “far stronger pace” of jobs growth than expected made it “more comfortable” with its above-consensus forecast of 5 per cent growth in gross domestic product (GDP) in 2019.

“With the unemployment rate falling to its lowest level since the 2000s boom, wage growth will continue to increase, boosting prospects for domestic demand,” said Dermot O’Leary, chief economist for stockbrokers Goodbody.

Mr O’Leary said the decline of more than 8 per cent year-on-year in agriculture employment was “a notable disappointment” that indicated the sector was having difficulties “even before any potential impact from Brexit”.

Revised unemployment rates were 4.7 per cent for March and 4.6 per cent for April, down from previous estimates for both months of 5.4 per cent.

For the quarter, the seasonally adjusted unemployment rate fell to 5 per cent, or some 120,300 people, down by 14,300 people. A year earlier, the rate was 5.6 per cent. The unadjusted rate in the quarter was 4.8 per cent.

“Full employment has arrived,” Mr O’Leary said.

Long-term unemployment

The long-term unemployment rate, meanwhile, dropped to 1.7 per cent down from 2.1 per cent in the same period in 2018.

Long-term unemployment, which accounts for almost 36 per cent of total unemployment, has been declining on an annual basis since the fourth quarter of 2012, the CSO figures show.

Some 106,900 people were classed as part-time underemployed by the CSO, with this figure down 6 per cent year-on-year. People who work part-time but would like to work more hours account for 22.6 per cent of part-time workers.

While the number of employees rose 5.3 per cent to 1,966,800 in the first quarter, the number of self-employed people fell 4.3 per cent to 323,900, the CSO said.

“Unlike the UK, there are few concerns around part-time or self-employed work driving the labour market,” said Mr Mac Coille.

The labour force, which like the numbers employed has never been bigger, rose 2.7 per cent to 2,416,300 on an unadjusted basis in the year to the first quarter of 2019. The participation rate nudged up to 62 per cent, up from 61.6 per cent.

The Irish unemployment rate is below the average for the European Union, while its employment rate is higher.

But while the pace of jobs growth in the economy is notably faster than in that of the State’s main trading partners, “it is also significantly choppier,” said Austin Hughes, chief economist of KBC Bank Ireland.

“While the first quarter numbers should underpin expectations of very healthy Irish economic growth in 2019, a less certain global environment and strains on capacity in some areas of the Irish economy, together with the ingrained volatility of Irish data, caution against simply extrapolating forward today’s data into projections of a dramatic surge in Irish growth.”