Numbers at work in economy hit record of 2.27m

Employment numbers hit a record 2.27 million in the third quarter of 2018 as buoyant conditions in the labour market entice more people back to work.

Central Statistics Office (CSO) figures show total employment grew by 3 per cent or 66,700 in year-on-year terms.

One of the most striking features of the economic turnaround has been the rapid acceleration in employment since the low-point of the recession in 2012. The latest increase was driven by growth in full-time employment, which rose by 44,200.

Total employment is now 46,000 higher than at the height of the boom in 2007, which means that, statistically, all the jobs lost during the downturn have now been recovered. However, the CSO cautioned that the State now has a bigger population and a larger workforce now than in 2007. Employment and participation rates are still below pre-crash levels.

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Net inward migration is playing an increasingly significant role in the expansion of Ireland’s labour force, according to the figures.

Goodbody economist Dermot O’Leary noted that while employment growth among Irish nationals was running at a “healthy 2.2 per cent year on year in the third quarter, employment among foreign nationals grew by 7.7 per cent year on year.

Foreign nationals now comprise a record 16.2 per cent of total employment in Ireland, he said.

The CSO was also forced to revise the State’s headline rate of unemployment up to 5.5 per cent for October from a previous estimate of 5.3 per cent. This means there were 143,800 people classified as unemployed in the third quarter.

The figures show employment increased in 10 of the 14 economic sectors with largest rate of increase recorded in construction, which saw the number of jobs rise by nearly 14 per cent or 17,900. Employment in construction continues to be one of the key drivers of recovery in the Irish labour market.

Financial sector

The survey threw out something of a curve ball, however, suggesting employment in the financial, insurance and real estate activities sector had declined by 6.7 per cent or 7,300. And this at a time when the sector is benefitting strongly from a pick-up in lending in the economy and a Brexit-related flow of jobs from London.

KBC economist Austin Hughes noted that the figures, though strong, indicated a slowing in the rate of growth over previous periods.

Ibec economist Alison Wrynn said employee turnover was now back at 2007 levels. “For the past few years, skills shortages within certain sectors were the main challenges facing the Irish labour market,” she said. “However, with unemployment now close to pre-crisis levels, these skills shortages will soon turn into labour shortages. This will cause employment growth to slow as firms will find it harder to fill vacancies.”

“While there is some scope for increased labour force participation, particularly for females,” Goodbody’s Mr O’Leary said, “migration will play a vitally important role in the coming years in easing labour market pressures.”

“While the unemployment rate continues to fall [down to 5.5 per cent in October], there is slightly more slack in the labour market than originally thought, with the rate revised upwards from 5.3 per cent in the original monthly estimate,” Mr O’Leary said. “That said, full employment is still likely to be achieved in the coming quarters.”