Employment growth slows sharply - CSO

IBEC senior economist Mr Aebhric McGibney was critical of the Government for allowing public-sector employment numbers to grow "without securing greater efficiencies or productivities".

Employment growth slowed sharply in the third quarter, with the public sector remaining the most buoyant segment of the economy in jobs terms.

The Quarterly National Household Survey, released yesterday by the Central Statistics Office (CSO), shows that 1.79 million people were at work in the third quarter, just 0.5 per cent more than in the same months of 2001.

This compares to an annual increase of 1.9 per cent in the second quarter and growth of 2.7 per cent between the third quarters of 2000 and 2001.

Within the public sector, employment numbers grew by more than 20,000 year-on-year, offsetting a decline of about 12,000 in the private sector.

Economists described the overall net employment growth of 8,200 as artificial and unhealthy, noting that the boost provided by the public sector would not be sustained in the future. "That won't be seen in 2003 so we'll be relying on the rest of the economy," said Goodbody Stockbrokers chief economist Mr Colin Hunt.

Mr Alan McQuaid, chief economist with Bloxham Stockbrokers, said the cost to the taxpayer for public-sector employment growth was "enormous". He added: "At some stage, someone's going to stand up and say it can't go on."

The fall in private-sector employment was most notable within the manufacturing sector, where numbers decreased by almost 17,000 or 5 per cent in the third quarter, when compared to the same period of last year.

Mr Gerry O'Hanlon, CSO director, said the survey reflected "a further slowing down in the rate of growth in numbers at work".

The latest research shows the unemployment rate rose to 4.6 per cent in the third quarter, its highest level since the end of 2000.

There were 86,700 unemployed people in the period between June and August, an increase of 7,200 in the year and 9,500 in the quarter.

The entire increase was recorded in short-term employment, suggesting that workers are becoming increasingly flexible.

The CSO noted that the "tighter labour situation" had been particularly harsh for younger workers, with 15,200 fewer of those aged between 15 and 19 at work in 2002 than one year previously.

Mr O'Hanlon dismissed a suggestion that more students may have simply chosen not to work this year. "I think it would be largely due to a lack of job opportunities on this occasion," he said.

The survey shows the average working week in the third quarter was 37.8 hours, down from 38.2 hours in 2001 and 38.4 hours in 2000. Mr O'Hanlon said that fall "would have been greater than any declines recorded in recent years".

This trend has been highlighted in the past as a possible contributor to the significant declines in income tax receipts this year.

He said the employment decline in the private sector was not surprising. "Many businesses are facing into much more uncertain trading conditions and their cost base, in terms of labour, energy and insurance, is rising at a faster rate than their competitors."