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FÁS releases latest Quarterly Labour Market Commentary

Published on 12th February, 2010

REFLECTING THE SHARP DECLINE IN EMPLOYMENT THROUGH 2009, AVERAGE EMPLOYMENT IN 2010 IS LIKELY TO BE DOWN BY 87,000 ON LAST YEAR’S AVERAGE.
THE UNEMPLOYMENT RATE IS FORECAST TO PEAK AT ABOUT 13.5% IN LATE 2010 – BELOW PREVIOUS FEARS OF A PEAK AS HIGH AS 16%.
EMPLOYMENT SHOULD STABILISE FROM EARLY 2011; HOWEVER AVERAGE EMPLOYMENT FOR 2011 STILL EXPECTED TO BE 11,000 DOWN ON 2010.

There have been signs in recent months that the upward trend in unemployment has begun to stabilise. However, it is too early to say whether the apparent stabilisation will persist.

While unemployment has risen across all occupations, craftspeople and manual workers have been hardest hit with unemployment in these groups rising to 25% or more, whereas the unemployment rate for professional occupations remains below 5%. Men have been relatively harder hit by the fall in employment and rise in unemployment than have women.

For a more narrowly defined group of craft and other occupations directly linked to the construction industry, unemployment has risen to over 30%. Also, although the unemployment rate for professional occupations remains below 5%, the rate for managers and professionals closely linked to construction has risen to over 13%.

The vast majority of unemployed people come from manual or lower-level service jobs. Managers, professionals and technicians together account for a minority – 14% – of the jobless.

In response to the lack of job opportunities, labour force participation has fallen particularly sharply for teenagers and those aged 20-24, reflecting postponement of entry to the labour force.

Almost 80,000 people participated in training in FÁS in 2009 and a further 26,000 were still in training at the end of the year.

Almost 11,000 people completed periods on FÁS employment programmes in 2009, and a further 26,000 were still engaged in these programmes at year end.

The number of new apprentices recruited by employers was down 59% in 2009, with construction-related apprentices down 69%.

Vacancies notified to FÁS were down 19% year-on-year in Q4 2009, with declines occurring for all occupations except health & care service workers. For the year as a whole, there were 55,000 vacancies notified to FÁS.

There has been a very strong link between economic growth and employment growth in recent years, and this has been particularly evident during the recession. However, the anticipated recovery in the Irish economy is expected to export-led, whereas job creation is largely contingent on a recovery in domestic demand. On balance, we are forecasting annual average employment to fall by 4.5% from 1,928,000 in 2009 to 1,841,000 this year and by a more modest 0.6% in 2011 to 1,830,000.

We expect the unemployment rate to rise further this year, peaking at about 13½% in the second half of the year. For 2011, we are forecasting a gradual reduction in the unemployment rate through the year, with the annual average falling to 12.6%. (In general, expectations as to the peak level of unemployment have fallen in recent months). However, the economic outlook for Ireland is still uncertain which makes forecasting more tentative than usual, with much hinging on a recovery in consumer spending. If the hoped for pick-up in consumer spending does not materialise, then the peak in unemployment is likely to be higher and later than in our current forecast.

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For further information please contact: Brian McCormick

t: 01-6070517, m: 087-2680301, e: brian.mccormick@fas.ie