Economists insist situation stabilising despite jobless hike

DESPITE one in eight of the country’s eligible workforce being unemployed and with the situation set to deteriorate further, economists claim the economy is now stabilising.

The latest figures from the Central Statistics Office (CSO) show 435,735 were claiming the dole at the end of July, 197,495 more than in the same month last year.

However, the rate of increase in job losses has slowed significantly since the start of the year. Rossa White, chief economist with Davy Stockbrokers, pointed out the increase from June to July of 10,500 followed previous monthly jumps of 12,000, 13,700, 16,200, 20,000, 25,300 and 31,400 respectively going back to January.

“It is another sign that the economy is gradually stabilising,” he said. “That has led to a reduction in the pace of job loss.”

Nevertheless, he said the present estimated unemployment rate of 12.2% is likely to exceed 13% by year-end and could peak at 15% by the end of next year. That compares to just 6.4% just a year ago.

Ulster Bank’s Lynsey Clemenger was equally upbeat about an upturn in the fortunes of the economy.

She said: “The improvement in the recent trends on the Live Register leaves us content with our forecast of an average unemployment rate of closer to 12% for the year as a whole. Just as the Government’s live register projection for this year now looks too pessimistic, by implication so too does its average unemployment rate forecast of 12.6%. Indeed, if our estimates prove accurate this would take some pressure off the already strained public finances, perhaps of the order of €200-€400 million.”

Despite the level of optimism displayed by economists, ISME chief executive Mark Fielding said the Government was not doing enough to address the economic crisis.

“While the Government have at last taken the issue seriously by introducing the Employment Subsidy Scheme, the reality is that the initiative is a mere drop in the ocean with regard to what needs to be done,” he said. “Many sectors of the business community continue to struggle with no assistance.

“What is urgently required is a co-ordinated approach to addressing the crisis and not piecemeal programmes that may only have limited success.”

Labour’s enterprise spokesman Willie Penrose pointed out this is the 21st successive month in which the numbers on the Live Register have increased.

“Those of us who lived through the 1980s hoped that we would never again see such numbers on the Live Register; now we are seeing figures of more than 100,000 greater than anything seen in the worst days of the 1980s.

“The focus of government policy has to be redirected to stopping the jobs haemorrhage and getting people back to work,” he said.