A degree of stability revealed in job figures

ANALYSIS:There are fewer public sector workers and more self-employed. But little sign of growth

GROW JOBS in the private sector and shrink public sector numbers to bring them into line with the Government’s much-reduced revenues. That describes the broad strategy pursued by the current two-party Coalition – and the last two-party coalition.

New job numbers show that both of those objectives have been met simultaneously – the first time that has happened since the recession began.

In the second quarter of the year, private sector employment grew. The numbers of self-employed and the numbers working for private companies were both up on the first three months of the year. By contrast, the numbers working in the public sector were down.

Among the positives from yesterday’s detailed quarterly jobs data was a rebound in hospitality sector employment – 2010 was its annus horribilis, with almost one in five jobs being shed.

Another positive was confirmation of an increasingly clear trend, in evidence over almost a year, that the slashing of jobs in construction is within sight of bottoming out.

And what passes for a positive in these times is that the shake-out in retail employment ended two years ago and job numbers in the sector have been broadly stable despite continued brutal trading conditions.

Taken in the round, does the hugely detailed information published yesterday on jobs suggest that the employment situation is set to improve?

The trajectory of total numbers at work shows a clear sign of stabilising, but there are a number of reasons to believe that net growth in employment is unlikely until next year, even if the euro crisis can be contained and the real economies in Europe and the US do not go in to recession.

First, more job losses in the public sector and construction are inevitable. Second, the relentless decline in industrial employment continues – despite export success. There is little reason to believe that the trend will suddenly go into reverse.

Third, there is only one sector in the private economy showing a clear growth trend. That is information and communications. But with about 75,000 people working in high tech, even if it were miraculously to double in size the effect would be limited – 300,000-plus people are currently jobless.

A final reason to believe that economy-wide growth in employment is not around the corner is that the recent rebound in real estate and financial services looks gravity-defying.

There were 103,000 people working in those sectors in the April-June period. This was the second consecutive quarter-on-quarter increase. The numbers are not far off the peak – a time when these sectors were are the heart of an unsustainable boom.

How can it be that those in banking and property – two of the most ravaged sectors of the economy – have been far less affected than the average sector? If something looks too good to be true, it usually is.

Separate figures on migration also published by statisticians yesterday prove what countless anecdotes suggest – more young Irish people are moving abroad to seek their fortunes.

The number of Irish people leaving topped 40,000 in the year to April, an increase of 45 per cent on the year to April 2010. This is unsurprising.

Yesterday’s jobs numbers showed an unemployment rate of 28 per cent among 20- to 24-year-olds. The only puzzling thing about the emigration figures is why they are not higher.

The OECD in Paris might have the answer to that. Yesterday, it published its annual Employment Outlook report. It made for grim reading.

“There were 44.5 million unemployed people in the OECD area in July 2011, some 13.4 million more than prior to the crisis,” it states.

It notes that just a handful of developed countries enjoy low unemployment, including places such as Luxembourg, Norway and Korea, none of which offers much in the way of opportunity for the legions of Irish jobless.

To make matters worse, the slowdown in the global economy threatens to push joblessness up further.

In Brussels yesterday, the European Commission cut its forecast for growth in Europe’s economy over the remainder of the year and spoke about a “stalled recovery”.

The head of the International Monetary Fund, Christine Legarde, was more ominous. In a big speech in Washington yesterday, she spoke darkly about the “narrowing path” the world economy is walking as its seeks a way out of the crisis and of “social tensions bubbling below the surface”.

All of this came against the backdrop of a second consecutive day of market calm. The panic about Greek default has subsided for now.

The calm won’t last. Markets are on hair trigger. A credit rating agency is set to downgrade Italy’s creditworthiness in the days to come. If and when that happens, it will be back into the vortex.