Fears grow as unemployment hits highest level in years

By Michael BrennanSaturday January 12 2008
FEARS over large scale job losses in the construction sector are growing as the latest figures show the highest unemployment rate for almost five years.
And unemployment is set to rise again, it was warned last night, even after the figure rose to 171,800 in December -- an increase of 2,100 on the previous month.
In an alarming sign of the knock-on effect of the slowing property market on the building trade, over 106,000 men were seeking benefits. This is an increase of 14,000 over the year, the Central Statistics Office (CSO) said in its report on the Live Register.
But there is worse to come, as analysts warned that many construction workers have not found employment after the Christmas break.
Dole
Davy Stockbrokers warned there would be an even sharper jump in the unemployment figures this month, as many building workers joined the dole queues.
"We have heard that many house builders or related workers were not re-employed after Christmas," its economist Rossa White said.
Earlier this week, both the Higher Education Authority and SIPTU warned that young men in the building industry were most at risk from long-term unemployment if the construction sector continued to slow.
And the CSO report appears to have realised these fears. There are now 21,168 men aged under 25 on the Live Register, compared to 12,121 women.
The construction industry employs 288,000 people -- one in eight of the entire workforce -- and accounts for nearly a quarter of all goods and services produced here.
According to the CSO, the unemployment rate was 4.7pc in December, which was both the highest level since 2003, and the highest rate of increase in joblessness since 1991.
The Department of Finance has forecast that unemployment will increase further to 5.6pc this year. And the employers group IBEC also said big losses were inevitable as the property market slowed.
Challenge
"This year, the Irish labour market faces its most significant challenge for some time as redundancies are likely to increase and net new job creation will fall to between 10,000 and 20,000 jobs," its senior economist Fergal O'Brien said.
"The fact the labour market for females has remained strong would suggest that the job difficulties to date have been confined to the construction sector."
IBEC said job creation would be at its lowest rate since the early 1990s.
Alan McQuaid, chief economist of Bloxham Stockbrokers in Dublin, said he thought creating 35,000 new jobs was possible. This would still be just half the rate of growth experienced in 2007.
McQuaid said there was "no doubt that the labour market would be nowhere near as strong as in recent years".
Fine Gael enterprise spokesman Leo Varadkar warned of further job losses in the slowing construction sector and a decline in the the number of jobs being created.
"This is a direct result of Government policies which caused Ireland to plummet in international competitiveness league tables," Mr Varadkar said.
"Jobs that have been moved overseas will not come back.''
And Labour enterprise spokesman Willie Penrose called on the Government to take a more energetic approach to job creation.
"'Complacency in the face of mounting numbers on the Live Register will get us nowhere. Much more effort is now required by the Government to protect existing jobs and to attract new investment," he said.
- Michael Brennan