Redundancies increased sharply last month, although the number of lay-offs contracted moderately compared with the same period in 2001, according to data released yesterday, writes Edward Power
There were 2,532 job cuts in November, a rise of 749 on the previous month, the notified redundancy index issued by the Department of Enterprise, Trade and Employment revealed.
Lay-offs fell by 4 per cent from November 2001 however - the first year-on-year decrease of 2002. Some 23,556 redundancies have been announced since January, against 19,828 for the whole of last year. The rate of lay-offs already outstrips the 2001 total by 28 per cent. It is now likely that 2002 will emerge as the worst year for job losses since the late 1980s.
Analysts said the increase was in line with expectations, following cooling in foreign investment over past months. The labour market had lost momentum following the wider downturn in the economy, said Mr Don Walshe, senior economist with Goodbody Stockbrokers.
It has entered a period of retraction and would probably stabilise but at a lower level. Measures in yesterday's Budget, which were predicted to fuel wage inflation, might lead to further volatility, he said.
The year-on-year slowdown in job losses suggested that the employment market had calmed after a period of upheaval, said Mr Alan McQuaid, chief economist with Bloxham's stock brokers.
"Jobs are still going to be created - but not at the rate witnessed through the late 1990s. It is clear that while things appear to have picked up slightly, people are still being made redundant."
High levels of inward migration had placed the labour market under stress. Despite the slowdown, the Republic was still perceived as one of Europe's most buoyant economies, Mr McQuaid said. "It is clear that people still want to come and work here although jobs are not available at the rate they previously were."
Notified redundancy figures do not provide an entirely accurate snapshot of the labour market as they have not been seasonally adjusted, he cautioned. When public sector recruitment was excluded, there was evidence that jobs growth was now running at a negative rate he said.
The data come in the wake of a study predicting further lay-offs unless increased flexibility is injected in the national wage bargaining model. The FÁS report warns unemployment will rise in the short term, even if there is a recovery in the economy in the near future.
"There is a real danger that cyclical unemployment will turn into structural unemployment if appropriate interventions are not in place to re-skill those who become unemployed during the downturn," the review says.
