Falling unemployment rate fuels hopes of economic recovery

Ireland’s unemployment rate declined again last month, providing further indication the economy may be finally turning a corner.
 
For a fourth month running, the number of people in Ireland claiming unemployment benefit fell. The latest Live Register figures found that numbers signing on dropped by 3,400 in August, giving rise to a standardised unemployment rate of 13.4 per cent, down from 13.5 per cent in July.
 
The encouraging unemployment figures were unveiled as the country’s services sector also grew at its fastest rate in more than six years. Positivity regarding the Irish economy was underpinned further by a series of welcoming business surveys from across Europe and China, pointing to an upswing in the global economy.
 
Joan Burton, Minister for Social Protection, said the figures provided concrete proof that the Government "was making progress in getting people back to work".
 
The Irish Small and Medium Enterprises Association (ISME) argued the "dysfunctional and over generous social welfare system" was negating the incentive for employees to head back to work, with business owners unable to match "over-generous" State hand-outs.
 
However, separate figures from the Central Statistics Office on "job churning" indicated the number of positions created during 2011 outpaced the number of job losses for the first time since 2007.
 
Ireland’s services sector accounts for around 70 per cent of the national economy and continues to thrive. The latest Investec Purchasing Managers’ Index (PMI) of the services sector rose from 57.6 in July to 61.6 in August.
 
Similarly, Investec’s sub-index for new business recorded its fastest rate of growth since March 2007, with respondents referring to “increased new business from both domestic and export markets” as a reason for such expansion.
 
Businesses within the Eurozone also had their best month in more than 24 months in August as orders increased for the first time since mid-2011.

Date published 5 Sep 2013 | Last updated 5 Sep 2013