Dan White: Our jobs recovery is still narrowly based
The good news is that more people are at work. However, the rise is confined to Dublin and a few provincial cities
THE fall in the numbers signing on to less than 400,000 disguises the fact that the labour market recovery is largely confined to a small number of sectors and locations, with many jobseekers and regions yet to feel the impact of the upturn.
Last month, 396,512 people signed on the Live Register. While this is still horrifically high, it is the first time the number of people signing on has been under 400,000 since May 2009. The unemployment rate is now estimated by the CSO to be 13.2 per cent, or almost one-in-seven of the workforce.
Even when seasonal factors are taken into account – there are more temporary jobs in sectors such as agriculture and tourism during the summer months – the numbers on the Live Register stood at 409,900 in October, a reduction of 3,700 on the previous month and 24,300 lower than the number of those signing on a year ago.
Unfortunately, the Live Register, which is published monthly, only tells us the number of people signing on and gives no information on the number of people actually working. To get this information, we will have to wait until the latest edition of the Quarterly National Household Survey is released next month.
However, even on the basis of what we already know, it is clear that the number of people at work is rising. The second-quarter QNHS showed the number of people at work stood at almost 1.87 million at mid-year, an increase of 33,800 over the previous 12 months.
Despite serious problems persisting in parts of the economy, it is now clear that some sectors are again seeing strong growth in employment numbers. Last week's Web Summit in Dublin saw nine US and European firms announce a total of 335 new jobs.
This year is shaping up to be another good year for jobs announcements by overseas companies. The IDA secured 70 investment projects in the first six months of 2013, up from 61 in the first half of 2012. These new projects will generate 7,000 new jobs between them.
Among the big jobs announcements from foreign-owned companies have been 450 at eBay in Dundalk, 200 at Yahoo in Dublin and 200 at EMC in Cork.
The biggest jobs announcements from indigenous companies so far this year have been by Glanbia Ingredients, which plans to create up to 1,600 jobs by 2018, plus 450 temporary construction jobs; and Eishtec, which is creating another 250 jobs by 2014.
So, with unemployment down and job creation up, is it time to officially declare the economic downturn over? While there are definitely encouraging signs, it might be a good idea to leave the champagne on ice for just a little while.
While there has been a noticeable quickening of the pace of job announcements by the multinationals, most overseas companies have opted to locate in Dublin.
More than half of the new jobs announced by IDA-supported companies last year, 54 per cent to be precise, were in the greater Dublin area.
A perusal of 2013 jobs announcements from IDA-supported companies reveals that this bias towards Dublin and the east coast has, if anything, intensified this year, with the vast majority of the remainder going to Cork and Limerick.
Not only are these new IDA-supported jobs largely concentrated along the east coast and in a handful of provincial cities, they are concentrated in just a few sectors – such as pharma, financial services and, more recently, information and communications technology, digital media, e-commerce and games.
Job creation by indigenous companies, while less skewed geographically, is also concentrated in just a handful of sectors.
While food and tourism are both performing strongly on the jobs front, other sectors, most notably construction and retailing, are barely registering a pulse.
This has led to the paradoxical situation of skills shortages in certain sectors at a time of near-record unemployment.
In fact, the more one looks at the new Irish labour market, the more it resembles the new Irish property market: a recovery of sorts in parts of Dublin, Cork and Limerick, but with large swathes of the country remaining mired in the deepest depression.
Actually, the similarities between the labour and property markets are not merely coincidental. One is almost certainly driving the other. What seems to be happening is that most of the buyers for the handful of houses changing hands in the better-established suburbs of Dublin, Cork and Limerick are in fact well-paid employees of either IDA-supported overseas companies or indigenous exporters.
We can only hope that the recovery in the jobs market proves to be built on more solid foundations than those on which the property price recovery appears to be. It is only by creating sustainable jobs rather than selling one another over-priced houses and apartments that we will generate an economy-wide and country-wide recovery.