Unemployment falls to pandemic low of 7.9% as labour market recovers

Ireland’s unemployment rate fell to a pandemic low of 7.9 per cent last month, down from 20 per cent in October last year.

The latest jobless figures from Central Statistics Office (CSO) point to strong recovery in the State's labour market since the lifting of restrictions in May.

The acceleration in employment was also reflected in the Government’s latest exchequer returns, which showed a strong pick-up in income tax.

According to the CSO, 205,246 people were estimated to be either out of work or in receipt of the Government’s pandemic unemployment payment (PUP) in October.

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This equated to a Covid-adjusted rate of unemployment of 7.9 per cent, down from 8.9 per cent the previous month and a pandemic high of 31 per cent in April 2020.

The standard measure of unemployment, which does not include PUP recipients, was put at 5.2 per cent.

“As the level of PUP supports are eased on a phased basis, the strength of demand for labour bodes well for those looking to return to work,” Jack Kennedy, economist with recruitment site Indeed, said.

The tightening of the labour market in recent months has also been accompanied by upward wage pressure, with the CSO reporting a 3.9 per cent increase in labour costs in its most recent quarterly update.

“Workers facing rising energy prices and other cost inflation, may look to use the demand for their services to push for further wage increases,” Mr Kennedy said.

Recently published Central Bank/Indeed research has found that in sectors such as construction and software development labour supply is not keeping pace with demand, putting upward pressure on wages, he said.

A separate survey by Ibec, published on Wednesday, suggested manufacturing companies access to labour and wage growth as the key challenges heading into 2022.