The only areas of employment growth in the last three years were education, health and the Civil Service

AT THE end of 2007, well over 2.1 million people were at work in the Irish economy. Yesterdays quarterly jobs figures from the Central Statistics Office showed that at the beginning of 2011 that number had fallen by almost 325,000.

The loss of more than one in seven jobs in an economy is as unusual as it is awful.

Less negatively, and as chart 1 illustrates, the Great Jobs Recession has been waning gradually in intensity since the worst of the shake-out in the labour market in the six-month periods either side of the first quarter of 2009. But until those blue bars in the chart turn to red ones, there will be no real dent put in dole queues and no real sense of recovery.

Unfortunately, a drill down into yesterdays figures suggest that it will be some time before those red bars pop up.

Chart 2 shows the sectoral employment declines over the past three years. What stands out so obviously is that the only areas of employment growth over that time were education, health and the Civil Service. The latter is pure public sector, the other two are overwhelmingly public sector.

By international comparison, the public sector was not bloated when the boom was at its height. But it is now a given that the economy has shrunk so much and the State is bust.

The health and education sectors are the third and fourth largest employers in the economy. Respectively, 232,000 and 148,000 people worked in these sectors in the first quarter of 2011.

Both reached their employment peaks as recently as the middle of last year. It is only in the past couple of quarters that they have begun to shrink. Given the commitment of the new Coalition to cutting numbers, employment is these sectors will fall further.

Public administration is overtaking construction as the fifth-largest employer, with 107,000 people working as bureaucrats in the first quarter of 2011. There has yet to be any progress is cutting numbers – the head count remains stuck at its all-time peak. It will also fall.

As chart 2 shows, employment in the financial, insurance and real estate sector has shrunk by just 5 per cent during the recession. And this despite the banking and property crashes.

Amazingly, employment in the sector actually grew strongly in the first quarter. It seems unlikely that this sector can continue to avoid job losses.

Retail and wholesale is the economy’s largest employer. At the beginning of 2011, 263,000 people worked in this sector. That was a fall of more than 4,000 in just three months. With consumers watching every penny, stores are unlikely to start hiring again soon.

Employment in industry continued to fall in Q1, despite high output levels.

If there is still plenty of bad employment news, with more to come in some sectors, there is little good news to balance it.

The best jobs performance in recent quarters was in white-collar sectors.

This could reflect strong services exports. And there the good news ends.

Chart 3 shows the large seasonally adjusted decline in unemployment. Given that the number of jobs is still falling in the economy, this looks like an anomaly. It could be accounted for by the CSO’s seasonal adjustment methods missing something.

Chart four shows Ireland in the context of its peer countries. Although joblessness was up on a year earlier, Greece’s huge increase in unemployment has propelled it into second place in the euro area and pushed Ireland back to third.

The chart also shows the gap between the strong core, where unemployment is low and falling, and periphery, where it is high and rising.

Something will have to give.