Number of unskilled jobs to rise
The CSO said the economy, as measured by GDP, grew by 4.1% in the 12 months to the end of June, but that employment growth of 4.5% was recorded for the same period. This suggested employment was falling in the high value-added sector of the labour market, with the shortfall being picked up by lower-paid jobs.
The CSO figures on economic growth also suggested that the government’s full-year target will not be met. The Department of Finance had predicted growth of 5% for the year to December.
But Goodbody Stockbrokers chief economist Dermot O’Leary said the latest figures showed the economy had continued to perform strongly and that the second quarter had compensated for a “lacklustre” start to the year. Mr O’Leary added that the figures quoted by the CSO may have underestimated the economy’s strength.
“It is clear that the buoyancy of the domestic economy is set to continue, with consumption set to lead the way, aided in large part by the windfall gains from the SSIA release in 2006 and 2007,” he said.
The CSO also released data on Ireland’s international payments yesterday, which showed a current account deficit of e1.17 billion in the second quarter. This was €268 million lower than in the previous quarter. Imports and exports of merchandise were both ahead, while imports of services fell. Exports of services were significantly ahead of the first quarter but behind the corresponding quarter last year.
Total imports grew by 2.3% in the first six months of the year, an increase that was largely driven by higher fuel costs and higher demand for cars. Mr O’Leary said exports remained “sluggish” and were down 0.5% in the six months to June.
The CSO also said there was evidence that tax changes in America may have influenced the level of funds flowing out of the country from American multinationals based here, which was higher than in previous years.
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