Amidst the many concerns about the economic outlook, the unemployment figures and the state of the jobs market remain encouraging. Despite all the difficulties facing businesses and consumers, unemployment edged lower to 4.2 per cent in July, compared to 4.3 per cent in June and 5.8 per cent one year earlier. That represents a fall of 36,000 in those registered as unemployed over the past year, bringing the unemployment rate to its lowest level in 21 years.
Some slowdown in the jobs market might have been expected given the cost-of-living crisis and its impact on consumer spending and on the markets Ireland depends on for exports. There are some anecdotal signs of companies slowing investment and hiring plans, given the uncertainty ahead, although labour shortages remain in many sectors. It offers an unusual contrast to negative confidence indicators here and abroad. The latest Bank of England outlook, for example, predicts a prolonged recession for the UK.
Some slowdown in hiring in Ireland looks inevitable in the months ahead, though what this will mean for overall levels of employment and unemployment remains unclear. Encouragingly, the jobs market emerged from the Covid-19 shutdowns in much better shape than expected, helped by Government supports. But the cost-of-living crisis offers another challenge – and businesses reliant on consumer spending will be nervous about what lies ahead.
The strong performance of the multinational-dominated sectors – such as life science, pharma and technology manufacturing and services – were significant supports to the economy through Covid-19. So far, they have remained resilient through the latest crisis too, though the dark clouds over some export markets could cause difficulties. And the tech sector and some of its players face their own particular challenges.
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For now the employment markets remain resilient. In the months ahead, it may be a case of trying to protect the gains which Ireland has made. But at least the starting point is strong.