Unemployment hits pandemic low of 12.4% as economy begins to rebound

The State’s Covid-adjusted unemployment rate fell to 12.4 per cent in August, its lowest level since the start of the pandemic, as the phased reopening of the economy saw more people return to work.

This was down from 13.5 per cent the previous month and 17.1 per cent in August last year.

The latest jobless figures from Central Statistics Office (CSO) suggest economic activity is picking up in tandem with the lifting of Covid-19 restrictions.

According to the CSO, up to 335,178 people remained either out of work or in receipt of the Government’s pandemic unemployment payment (PUP) in August.

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The youth unemployment rate remained high at 25.6 per cent, but was also down on previous months.

The standard measure of unemployment, which does not include PUP recipients, was put at 6.4 per cent, marginally down on the July figure.

The figures come as Government this week signalled the phased ending of restrictions with public transport reverting to full capacity on Wednesday and an easing of limits on indoor and outdoor events due next week.

There will be further changes on September 20th, when offices will begin to reopen while rules on physical distancing and mask-wearing in most circumstances will lapse on October 22nd.

Positive news

"Today's figures provide some positive news, with the continued downward trend in both the Covid adjusted rate and standard unemployment rate," Jack Kennedy, economist at recruitment website Indeed, said.

“The hope is that pent-up demand for sectors such as nightlife and entertainment may provide a boost to these businesses, as people look to let loose after lockdown,” he said.

“However, the challenge facing businesses now is a potential labour shortage. There’s no doubt the pandemic has brought lasting change to people’s relationship with their work, with many hoping to continue the flexible and remote working opportunities the pandemic has brought,” Mr Kennedy said.

“We’ll likely see businesses become more competitive to attract and retain staff in this new world of work. This goes beyond just wage increases – flexibility and wellbeing are now key currency in attracting talent,” he added.

Chief economist at Grant Thornton Ireland, Andrew Webb said the latest figures “continue to reflect the deep economic pain of the past 15 months but labour market indicators now appear to be consistently moving in the right direction, and a more sustained sense of optimism is evident.”

He said new research from the professional services firm shows 76 per cent of Irish businesses are optimistic about the outlook of the economy over the coming 12 months and close to four in 10 Irish businesses are expecting to increase employment as society returns to normal. “Should this optimism carry through to action, the economy looks set for a strong year-end performance,” he said.