Drop in jobless rate fuels economic recovery hopes
HOPES are rising that the economic recovery is gathering momentum, as new figures show service industries booming and unemployment falling at an ever quicker pace.
Central Statistics Office figures revealed yesterday that the number of people signing on the Live Register fell for the 14th straight month in August.
It comes days after other figures showed that factories are producing more and new orders are rising – while consumers are buying big ticket items like cars once again.
House prices are also rising while the value of commercial property sold in the first half of this year already outstrips the value of all commercial property sold last year.
CSO figures last week showed 33,800 extra jobs have been created in the last year. Yesterday's figures show the jobless rate, according to the Live Register, is now down to 13.4pc compared to 14.6pc a year ago and a peak of 15.1pc in February 2012.
The services sector – which includes hotels and restaurants – recorded a sharp growth in new business last month thanks largely to the good weather, with the rate of expansion the fastest in more than six years, a report yesterday showed.
The Live Register figures show the numbers signing on fell by 3,400 on a seasonally adjusted basis in August, down to 415,300 – a tally which has been falling since June 2012.
Social Protection Minister Joan Burton welcomed the Live Register drop. "Although these numbers remain far too high, real progress is being made, and getting people back to work will remain the Government's top priority," she said.
But Brid O'Brien of the Irish National Organisation of the Unemployed said that the drop was mainly down to people emigrating, having their benefits cut off and going on to workplace internships and training schemes rather than real jobs.
"The figures mask the continued high unemployment and the fact many people simply cannot find any job," she said.
The Irish Small and Medium Enterprises Association said despite a slight improvement, job creation was being hampered by an inflexible social welfare system that was "unfit for purpose", and overgenerous state benefits.
Jobs Minister Richard Bruton rejected the criticism.
"Joan Burton has completely transformed the outlook of the social welfare system. It's no longer about paying people while they remain idle, it is about activation and giving people opportunities," he said. Mr Burton said that the Government was planning to overhaul the system of rent supplement.
It is worth up to €1,000 a month to families out of work but is instantly cut off if they get work. It is due to be replaced by a new payment which will taper off gradually if a person finds work.
Mr Bruton said that reforming this payment would "remove a significant obstacle" for people being offered jobs. Fianna Fail jobs spokesman Dara Calleary said Ms Burton had to take action to tackle the social welfare traps identified by her own Citizens Information Board in a recent report "as a matter of urgency".
Alan McQuaid of Merrion stockbrokers said that economic data in recent weeks had been quite positive. "But the real measure of how well the country is doing is the level of unemployment. As things currently stand, the labour market is still quite weak despite the fall in the past year or so in the Live Register. But there are encouraging signs," he said.
However, some experts have warned that another tough Budget next month could damage fragile consumer confidence and tentative growth by taking billions more out of consumers' pockets just as they're beginning to loosen the purse strings.