According to the latest Quarterly National Household Survey (Q2 2010, QNHS) from the CSO the national unemployment rate currently stands at 13.6%. The current rate has increased from 12.9% in the previous quarter and increased from a rate of 12% a year ago.

The QNHS has been in operation since September 1997 (replacing the old Labour Force Survey) and therefore provides a useful means of illustrating and monitoring labour market trends over time. The bulk of the data available through the survey is only available at a national level, however the survey does provide a breakdown of ILO Economic Status (In employment, Unemployed, In Labour Force, Unemployment Rate and Participation Rate) at a NUTS3 regional level. The unemployment rate here is calculated using the number of unemployed as a percentage of the total labour force and is based on the ILO (International Labour Office) labour force classification. This means that it’s also possible to put the Irish unemployment figures (national and regional) in context with international figures.

National

From the beginning of the survey up to the end of 2007 the unemployment rate In Ireland initially dropped from 10.4% in Q4 1997 to a low of 3.5% in Q3 2000. From this point up until the end of 2007 the rate remained relatively stable with an average rate of 4.3%. In early 2008 we started to feel the full effects of the downturn with large numbers signing on the live register (see here) and witnessed the subsequent unrelenting climb of the unemployment rate to today’s lofty heights of 13.6% (Figure 1).

Figure 1: ILO Unemployment Rate 2007 to 2010

Much of this increase has been attributed to the collapse of the construction industry and housing boom in Ireland. This has had a major effect on the unemployment rate due to the strong over-dependence of the workforce on construction related employment. A significant number of redundancies in industry related employment have also significantly contributed towards this increasing rate. Figure 2 details the strong dependence of the workforce on construction – at the end of 2006 almost 12.5%(268,400) of the labour force (employed and unemployed) were employed in construction related employment. This figure is now at 5.8% (125,300).

Figure 2: Sectoral Employment as a proportion of Labour Force

Another worrying aspect of the current unemployment trend is the increased number who are now classed as being ‘long-term unemployed’. According to the CSO this relates to those unemployed for one year or more expressed as a percentage of the total labour force. Since the beginning of 2008 the number of people now classed as ‘Long-term Unemployed’ has increased by 97,000. The Q1 2010 figure now represents 5.9% of the total labour force (Figure 3).

Figure 3: % of Labour Force classed as Long-Term Unemployed

European context

As per Q1 2010 the unemployment rate (12.9%) for Ireland was the 6th highest in the EU27 with only the Slovak Republic (15.1%), Lithuania (18.1%), Estonia (19.8%), Spain (20%) and Latvia (20.4%) with higher rates. Our current standing is in stark contrast to the situation 4 years ago when the unemployment rate in Ireland was the lowest in the EU27 at 4.2% (Figure 4). Over this 4 year period Ireland, Estonia, Lithuania, Latvia and Spain have witnessed the greatest increases in unemployment rates. On the other hand countries such as Poland, Germany, Auatria and Malta have improved and unemployment rates have decreased (Figure 5).

Figure 4: ILO Unemployment Rate - Q1 2010

Figure 5: ILO Unemployment Rate - Q1 2006

Regional

There is considerable variance in unemployment rates across the country with the highest rate of unemployment currently in the South-East (18.1%) and the lowest in Dublin (11.5%). Dublin currently accounts for 23% of all those classed as unemployed in the country with a total of 69,500. This number has increased by 3.8% since Q1 2010 and by 7.5% in the last year. The rate of increase outside Dublin has been much higher and since Q2 2007 the regions that have been hit the hardest are the South-East, South-West and the West (Figure 6).

Figure 6: % of Labour Forced classed as Unemployed, Q2 2007 and Q2 2010

Justin Gleeson

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