Friday 15 November 2019

Signs of recovery, but we need to pick up pace

THE "firsts" keep coming. Yesterday, it was the turn of employment, with the first increase in the numbers at work since the crash of 2008. This follows multi-year improvements in interest rates and economic growth, among other indicators. They are baby steps on the road to recovery. The challenge is to turn them, if not into giant strides, at least into a decent pace.

The figures tell a story of a changing economy, as well as tentative recovery. The biggest percentage rise was in agriculture, reflecting both buoyant conditions and a reappraisal of the value of such jobs.

The continuing impact of foreign companies in the knowledge industries is seen in the 11,500 rise in employment in IT and professional services. There was even an increase in building jobs, which were back over the 100,000 mark.

It is more difficult to know what to make of the fall in unemployment to a little more than 14pc. There should be huge relief that forecasts of a rise above 15pc this year now look unlikely.

But much of the fall is due to continued heavy emigration, and longer periods in education and training. There is a bit more reason to cheer the unexpected fall in long-term unemployment.

One can also see starkly the effects of the decision by Government and unions to put incomes ahead of jobs. The total increase in work was just one-tenth of a per cent – and it would have been four times that but for the job-shedding in the public sector.

There is little evidence that the Irish public sector was over-staffed in general. But it was – and is – too expensive for the country's revenue-raising capacity.

While there are limits to pay cuts, it would be hard to think of a more job-killing policy than the campaign to have recruits to the public service paid the same as the inflated bubble salaries of existing staff.

Government policy must concentrate on nurturing that growth to the maximum extent possible, while waiting for a boost from abroad. As well as finally cleaning up the banks, it must concentrate even harder on efficiency – both its own and that of private services.

Irish Independent

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