Sunday 19 January 2020

Recovery boost as job gains match losses for the first time in five years

John Mulligan

John Mulligan

Survey shows first 'green shoots' out of economic mayhem as more than half of businesses expect activity to rise in 2012

THERE are now as many jobs being created in the country as there are being lost, boosting hopes that the battered economy may at last be recovering.

A new report out this morning shows that for the first time in four years there are clear signs that Irish businesses are doing better.

The report from KBC Bank Ireland and Chartered Accountants Ireland -- which covers the first quarter of 2012 -- also points to a stabilisation in the jobs haemorrhage that has caused social devastation since the financial crisis began in earnest during 2008.

The survey finds:

• Job gains matching job losses for first time since 2007.

• Irish business expects pace of recovery to strengthen.

• Most businesses report 2012 less difficult so far.

• Two-thirds of businesses expect to hire in next three years.

• Just over half expect activity to rise this year.

After five years of economic mayhem punctuated with bank nationalisations, a bailout and severe austerity measures, the new report could signal some of the first 'green shoots' of recovery that have been heralded but failed to materialise.

"Probably the most encouraging aspect of the survey are indications that employment across the Irish economy may be starting to stabilise," said KBC Bank Ireland chief economist Austin Hughes.

But he warned that there were still sharp differences in the health of various sectors.

However, even those companies in the hammered construction sector have a slightly more positive outlook.

"Job trends still vary widely between sectors as companies continue to try to 'right-size' their headcount for very different levels of activity. However, the broad picture emerging from the survey hints at a more stable employment situation that would be very supportive for sentiment and, ultimately, for domestic spending."

Unemployment

Ireland's unemployment rate rocketed to nearly 15pc from just over 4pc in early 2007. However, figures from the Central Statistics Office show it stood at 14.3pc last month.

There have been a number of high-profile job announcements lately. Last week, US electronics giant Apple confirmed it plans to add 500 jobs to its Cork workforce. Paypal said in February that it will create 1,000 new jobs here over the next four years.

The IDA said it helped to create 13,000 new jobs in 2011, for a net increase of just over 6,100 after jobs losses among multinationals are factored in.

John Hannaway, the president of Chartered Accountants Ireland, said that the expectation among Irish businesses is that while growth this year will be limited, a recovery should be more evident across the economy within three years.

The survey said some of the feel-good factor reported by Irish firms may be down to lessened concerns over the health of the eurozone.

However, the region's stability is now sharply back in focus, with political turmoil in the Netherlands and upheaval in France.

While the report warned against drawing too many conclusions from the positive data for the first quarter of this year, its authors say that coupled with other official positive data that there has been a "firming" of business activity across Ireland in 2012.

The survey also found that while 64pc of Irish businesses think the European fiscal treaty is either quite or very important to their businesses, but 27pc don't think it will have any notable impact.

Irish Independent

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