Naysayers need to take stock of positive employment data

There is now every possibility employment will re-attain 2007 highs over the next couple of years, writes Jim Power.

Last week I heard a Fianna Fáil TD on radio argue that the Irish economy is still in trouble.

Comments like this are the reason why I have such a cynical attitude to politics and the political classes in general.

The fact is that over the past three years the economy has made a pretty dramatic recovery from what was a very deep and very dark hole. Incidentally, this hole was dug by the party of which that TD is a member.

Almost every statistical release over the past three years has been positive and a very real recovery story has been building.

Obviously, when any economy experiences the sort of blow out that Ireland suffered from 2007 onwards, it is stupid to think that after three years of recovery life will return to normal and the negative legacy issues will just disappear overnight.

Those negative legacy issues are pretty clear to see – we do not have sufficient housing supply; public services are under considerable pressures following a period of controlled spending; the regional economic recovery has lagged the Greater Dublin Area; and personal finances are still stretched in many cases.

Provided the financial resources are utilised properly, it will still take another four or five years of growth to lessen these problems, but that cannot be taken for granted.

Generating sufficient resources is one thing, but as we know only too well in Ireland, utilising those resources efficiently and effectively is a different matter entirely.

We do not have a great track record in that regard.

There are still an awful lot of naysayers out there, but most of them are politically motivated.

Consequently, they must have found the news on employment this week difficult to swallow. The labour market news published by the CSO on Tuesday was quite simply, very impressive.

Employment expanded by 65,100 - or 3.3% - in the year to the fourth quarter of 2016 to reach 2.048 million. This represents an increase of 199,200 since the final quarter of 2012, which was virtually the low point in the labour market cycle.

Employment in the final quarter of 2016 was still 108,000 lower than the final quarter of 2007, but solid progress is being made.

In the year to the end of 2016, the increase of 65,100 comprised of an increase of 71,900 in full-time employment and a decline of 6,800 in part-time employment.

When the initial labour market recovery commenced, much of the employment being created was part-time because employers remained unsure about the durability of the economic recovery.

Over time, this has changed and the fact that all of the increase over the past year was due to full-time employment does say something very positive about the nature and durability of the economic recovery. Business is now believing it.

The really positive aspect of latest labour market data is the sectoral breakdown. The CSO breaks down the labour market into 14 sectors, and for the first time in a long while, all 14 sectors recorded positive growth in the year to the end of 2016. The construction sector leads the way with an increase of 11,600 jobs; next is industry with 10,700 extra jobs.

The broad sectoral spread is indicative of a broadly-based economic recovery.

It is clear that Government cannot take all of the credit for this labour market renaissance. Ireland is benefitting from the fact the global economic background is becoming stronger. The US and UK did well in 2016 and continue to do so, but the ongoing gradual improvement in eurozone conditions is to be particularly welcomed.

There is now every possibility employment will re-attain 2007 highs over the next couple of years. This would represent success by any measure, but will the naysayers smile? Not a chance.


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