Jobs market stabilising, no more tax rises

IBEC, the group that represents Irish business, today published its first IBEC Jobs Report of 2013, which found that 5,030 new jobs were announced during the first quarter of the year. Last year saw the Irish labour market’s first annual increase in employment since 2008, unemployment is expected decline somewhat this year but will remain stubbornly high through to 2014. 

IBEC Chief Economist Fergal O’Brien said: “It is crucial that positive employment trends are not undermined by tax increases. Any further increase would make work less attractive, undermine the ability of companies to invest and create new jobs and damage hard-won competitiveness gains of recent years. Ireland’s marginal income tax rate is already too high – the next change will have to be downwards.

The IBEC Jobs Report analyses the various national employment statistics, data from IBEC surveys and job announcements to provide an overview of employment trends in the economy. It is an initiative of IBEC’s Driving Ireland’s Recovery campaign. The report says:

• Unemployment decreased by 19,200 or 6.1% in the year to Q4 2012, with the total numbers unemployed now standing at 294,600. However, a reduction of 18,000 in the labour force was the primary reason for this. The fall in the labour force is due to a combination of a rise in the number of discouraged workers (those no longer seeking employment) and emigration.
• Numbers in long term unemployment also fell 10% over a 12 month period but remain worryingly high at around 60% of total unemployment.
• The private sector was a net contributor to job growth in 2012. There was a 2.3% fall in numbers working in the public sector over the past year, while  employment in the private sector rose by almost 1%.
• There are large sectoral divergences in the labour market. In the year to Q4 2012 a number of sectors added jobs, including IT (+7.1%), agriculture, forestry and fishing (+12.1%) and technical and scientific activities (+6.2%). On the other hand, employment fell on an annual basis in industry (-3%), construction (-4.3%) and transport (-3.9%).
• Retraining and education must be prioritised to avoid a skills mismatch for vacancies in the future, when the jobs market recovers.
• The outlook for private sector employment growth in 2013 is positive. The services sector is forecast to provide the main source of sustained employment growth.

“While it is positive to see that our unemployment rate has dropped back, it is worrying that this is mainly due to a decrease in the labour force. From a policy perspective, it is essential that we give hope to young jobs seekers, in particular, and also ensure that we keep people as close as possible to the workplace through training and upskilling programmes. Economic recovery will be dependent on our skills pool and we must do everything possible to retain those skills in Ireland and to help the unemployed to upskill ” concluded Mr O’Brien.