The Irish labour market weakened significantly in 2002 with the unemployment rate creeping up to 4.5 per cent. The number of new jobs created reached its lowest level for many years, according to figures released today.
The latest instalment of the Quarterly National Household Survey which is widely accepted as the most accurate barometer of the Irish labour market shows there were 84,100 persons unemployed in the fourth quarter.
This represented a seasonal decrease of 2,600 in the quarter but an annual increase of 11,500 on the fourth quarter of 2001 when there were 72,600 persons unemployed.
The unemployment rate was 4.5 per cent in the fourth quarter of 2002, compared with 4 per cent in the fourth quarter of 2001. On average, employment increased by 23,600 or 1.4 per cent last year. This compares to average annual increases of 2.9 per cent in 2001, 4.7 per cent in 2000 and 6.3 per cent in 1999.
However the growth in employment was largely due to hiring in the public sector implying an almost stagnant private sector. The sectors showing the largest annualincreases were health (+11,700), public administrationand defence (+5,700) and education (+5,300).
People in the 25 to 44 age group were the hardest hit by economic slowdown. The survey shows that 60 per cent of the rise in the numbers unemployed was concentrated in the 25 to 44 year age group.
Short-term unemployment increased by 8,100 to 59,300 and long-term by 3,400 to 24,700.
Mr Austin Hughes, chief economist with IIB Bank in Dublin, said the figures are consistent with a picture of a continuing but controlled slowdown in economic activity in Ireland in the latter stages of 2001.
Mr Hughes noted that employment in sectors largely dependent on domestic spending such as 'wholesaling and retailing' (+1.9 per cent), hotels and restaurants (+3.0 per cent) and even construction (+3.2 per cent) showed reasonably positive trends suggesting a measure of resilience in the economy.
He said today's data are still consistent with a modest rise in economy wide activity which IIB estimates at 2 per cent in 2003.
Mr Hughes said that IIB expects employment to fall by around 15,000 in 2003. However he cautioned that this estimate may prove conservative if the long waited global economic recovery fails to materialise in the latter end of the year.
If the world economy remains in its current stupor and if sterling and the dollar slide further against the Euro between 25 to 30,000 jobs could be lost, Mr Hughes warned.