'Positive dividend' expected in labour market as economy gains momentum

AN UPBEAT economic assessment was given to the Dáil by Minister for Finance Brian Lenihan when answering Opposition questions.

He said there was now mounting evidence that economic conditions were stabilising and most commentators now expected a resumption of positive growth from the second half of the year.

“As the economy gains momentum, we can expect a positive dividend in the labour market, both in terms of reduced unemployment and the return of many recent migrants,” he added.

Mr Lenihan said the €3.9 billion exchequer deficit at the end of March was generally in line with expectations for that point of the year.

Tax and expenditure performances were broadly in line with his budget plan.

At this early stage, he added, it was unwise to draw too much from the monthly data as there was considerable volatility in the figures.

Mr Lenihan said data available for the first quarter of this year provided some evidence that unemployment was close to its peak. However, a decline in the size of the labour force, due to outward migration and falling participation rates, was part of the reason for this.

The number of non-Irish nationals in the labour force was estimated to have declined by 33,600, 10 per cent, year-on-year in the fourth quarter of 2009, he added.

Mr Lenihan said there was also considerable anecdotal evidence of outward migration of Irish nationals.

“The budget day forecast is for unemployment to average 13.25 per cent this year,” he added.

“While this is still too high, it must be remembered that this time last year some commentators were projecting an unemployment rate in excess of 16 per cent for this year.”

Labour’s Joan Burton said that the greatest single social and economic challenge facing the State was to get nearly a half-million people back to work. There were hundreds of thousands of people on three-day and four-day weeks.

Ms Burton insisted the only reasons the unemployment figures were slightly better than expected was “because Fianna Fáil has returned the country to the valve of emigration”.