A return to employment growth will depend on a resumption of domestic demand, according to Dr Ronnie O’Toole, chief economist with National Irish Bank.
But data from the first quarter of the year showed that demand in the building and construction sectors declined by 16%. In public administration, it was down by 25.
The evidence was that the vast majority of employment in developed economies related to domestic consumption.
But the good news was that the economy grew by 2.7% in the first quarter, ending a losing streak of eight consecutive quarters of contraction.
Dr O’Toole said that non-Irish nationals had experience the worst of the recession with unemployment at 30% for this group over the past two years compared to 9% for Irish born.
This was not, as was commonly believed, because non-Irish nationals were concentrated in industries which had contracted the most, such as construction.
In every economic sector the loss of jobs by non-Irish nationals had been much more severe than for the Irish.
For example, the employment of Irish nationals in the hospitality sector rose 5% over the past two years, while that of non-nationals had fallen by 23% This might be due to differences in skill levels or union membership.
Another possibility was that family-owned enterprises which account for 40% of all local services jobs were ‘soaking up’ unemployed Irish family members.
There was also a ‘pull’ element with the strong Polish economy attracting expatriates home.
Polish GDP was expected to grow by 3% this year. Wages had increased there in recent months.
Net emigration had resumed, although this was entirely composed of non-Irish national workers.
Net migration was around 46,000 people of working age over the past year, with net exits of non-national workers of 60,000.
There was no evidence yet of net emigration among Irish nationals, Dr O’Toole said.
Net emigration could remain high at 30,000 per annum over the next two years, though this was lower than the current level.
Article courtesy of the Evening Echo newspaper.