Jim Power: Forget Brexit and Donald Trump, jobs is the good news story
That is a staggering statistic, in the context of challenges such as Britain’s exit from the EU and the uncertainty generated by the election of Donald Trump as US president.
It goes to show how leaders of business just get on with the job of doing business and allow economists to get on with the job of worrying, and politicians with the job of engaging in endless, and meaningless, bickering in the Dáil.
The role of government should be to create the environment in which businesses create jobs, and let them get on with it.
This was demonstrated again during the week, with the release of employment data for the third quarter. Total employment in September reached 2.04m, which represents growth of 57,500 in employment over the past year, and growth of 13,500 over the past three months. Employment is now at the highest level in eight years.
The long-term unemployment rate fell to 4.2%, and long-term unemployment accounted for 52% of total unemployment, down from 56.7% just two years ago. There were 199,200 more people at work in the third-quarter of 2016 than in the third-quarter of 2012. This is all good stuff.
The most negative consequence of the crash of 2007 was the collapse in employment, but the manner in which the number of people at work is bouncing back is impressive.
Of course, those on the political left will not have the good grace to compliment government, or to compliment the businesses that are creating the jobs. There are no votes in that.
It is great to see job creation and it is also great to see such optimism from our business leaders. However, they do face significant challenges over the next couple of years, as does the overall economy, based on what we currently understand about external risk factors. Brexit is very much top of the pile, from an Irish perspective, particularly as we still have little idea about how it might develop.
For many businesses, the performance of sterling is the most immediate issue, but at least the UK currency has regained some lost ground in recent weeks. While the English high court decision that parliament should make the ultimate decision to trigger Article 50 has given some support to sterling, the euro has its own concerns.
The upcoming referendum in Italy has the potential to create enormous political uncertainty that could ultimately threaten that country’s membership of the EU.
Italy is an un-lanced boil and has been for some time. The French election is also potentially problematic. While, at this juncture, victory for one of the centre-right candidates appears the most likely outcome next year, one can take nothing for granted in the world of politics. Witness Trump and Brexit.
Marine Le Pen has pledged to take France out of the euro, and ultimately out of the EU. Victory for her would cast the EU project into serious turmoil. Losing the UK would be bad, but losing one of the founding fathers, France, would be catastrophic.
The bottom line is that while sterling has big issues to worry about, the euro is not devoid of difficulty. Perhaps we have passed the point of maximum sterling weakness, for the moment at least, which would relieve some concerns for Irish exporters to the UK.
Furthermore, at current exchange rates, it simply does not make financial sense for shoppers to trundle north of the border for grocery shopping, unless one has a mind to consume vast quantities of alcohol.
However, cross-border shopping has become very fashionable again and is pressurising retailers south of the border.
The longer-term Brexit-related issues are still very real, however.
Apart from potential currency volatility, they include supply chain issues: Trade restrictions, labour mobility, and market volatility. These are all issues that will unfold over the next couple of years and will inevitably generate uncertainty. But current levels of confidence and job-creation demonstrate a of resilience born of having lived through one of the most horrific economic crashes any country has ever experienced.
Long may it continue.
