The downturn in the housing market has not yet led to lay-offs in the construction sector, but it will do in the second half of 2007, Davy Stockbrokers said yesterday. Laura Slatteryreports.
Davy's comments came as figures showing a slight drop in the number of people claiming unemployment benefits were published by the Central Statistics Office (CSO).
The seasonally-adjusted live register of people claiming unemployment benefit or assistance fell by 300 to 157,000 in March. This compares with an increase of 1,500 in February.
There was an unadjusted monthly decrease of 3,530 on the live register in March, compared to an increase of 600 in February.
Davy economist Rossa White said that the numbers showed that housebuilders and people working in industries dependent on the housing sector had not been laid off in any great numbers, despite a 20 per cent drop in the year-on-year rate of housing starts over the past seven months.
But Mr White said the live register figures were likely to deteriorate in the second half of the year, as the first signs of the housing slowdown reach the labour market.
A time lag of nine to 12 months may exist between last August and September's peak in housing volumes and job losses in the sector.
Employment growth in the construction sector as a whole may slow to zero by the end of the year, Davy said.
Davy expects the live register total to breach 160,000 by mid-summer.
The number of claimants, which includes part-time, seasonal and casual workers who are entitled to jobseekers' benefit or assistance, has remained stable in a tight range of 155,500-157,500 for the past nine months.
However, Bloxham economist Alan McQuaid said that scaremongering about the labour market was way over the top. "It seems to us that the public is being brainwashed into thinking we are going to see a serious rise in unemployment in the near future," he said.
He pointed to a jump in the increase in vacancies in the services industry in the latest survey by Fás and the Economic and Social Research Institute (ESRI), and said that more attention should be given to this positive development rather than to the fall in construction sector vacancies.
The monthly adjusted decrease in the live register consisted of an increase of 600 men and a decrease of 900 females.
The estimated number of casual and part-time workers on the live register last month was 8,111 men and 12,763 women.
On an annual basis, there was an unadjusted increase of 326 in the live register, or an increase of 0.2 per cent, in the year to March.
The live register is not designed to be a measure of unemployment, which is recorded in the CSO's quarterly national household survey.
The latest seasonally-adjusted unemployment figure, for September to November 2006, showed that there were 90,600 people unemployed.
