Wednesday, February 27 16:51:01
Analysts today hailed this morning's jobs data from the CSO as the first real signs that the labour market may be turning as the numbers employed rose for the first time since the crisis began in 2008.
Economists agree that the scale of improvement in the Irish job market is modest and is likely to remain so but that the data suggests healthier economic activity is beginning to support jobs.
In the final quarter of the year, 1.85 million people were in jobs, a rise of 6,500 on three months earlier, according to seasonally adjusted figures from the Central Statistics Office.
Revisions to the third quarter data now show that growth was also recorded in that period. It is the first time since employment began to contract in 2008 that jobs growth has been recorded in two consecutive quarters.
This growth, combined with people leaving the jobs market, led to a decline in the numbers formally unemployed by more than 12,000 between the third and fourth quarters of last year.
The number of unemployed stood at 303,500 in the final three months of last year. That amounts to 14.2 per cent of the labour force.
Austin Hughes of KBC Bank said that the surprisingly large drop in unemployment rate reflects emigration, re-entry into education and retirement as well as slightly better jobs climate.
Davy Research noted that we already knew from last week's earnings release that public sector employment fell by 4.3pc in 2012. Total employment fell by 0.6pc. But excluding public sector job cuts, private sector employment increased by 0.4pc in 2012, the first rise in many years. "That said, the pace of annual private sector employment growth slackened a little in Q4 2012 to 0.7pc, down a little from 0.8pc in Q3 2012."
Dermot O'Leary of Goodbody Stockbrokers asked if this marked the turning point the country has been longing for for years.
"Headline employment numbers do not tell the full story about the Irish labour market. To get the full picture, one must look at the breakdown by sector and by type of job. On the latter, while full-time jobs accounted for the bulk of the increase in the quarter (5,400 of the 6,500 quarterly increase), the number of full-time workers was down by 13,000 (-0.9pcpc) over the year, whereas part-time employment grew by 14,000 (+3.2pc). Looking at the sector breakdown, eight of the fourteen sectors experienced a fall in employment on an annual basis. However, only four experienced a quarterly decline, relative to seven in Q3. This may indicate a turning point in the labour market and it highlights the diverging fortunes in some sectors of the economy," he said.