Two data releases this morning from the Central Statistics Office (CSO) point to more stable trends in employment and industrial production in Ireland.
To begin, data released this morning by the CSO show that the number of people on the Live Register in Ireland has fallen for a ninth successive month. Some 2,200 people left the register during March, taking the total to 426,100 or 5.2% below the peak of 449,500 recorded in September 2010.
The standardised unemployment rate in March, at 14.0%, was unchanged from the revised rate for February. The official unemployment rate (QNHS) stood at 14.2% in Q4 2012, which implies that the improving trends observed since the standardised rate peaked at 15.0% in Q1 2012 have continued into this year.
A leading contributor to the decline in the Live Register has been people exiting the labour force. In this regard, we note that annual decreases in the number of persons aged under 25, a key cohort for emigration, on the Register have been recorded in all months since July 2010. Seasonally adjusted data show that while persons under 25 years of age account for only 16% of those on the Register, this age group accounts for 64% of the total decline in the Register over the past year.
Outside of that, the latest QNHS showed that the Irish economy saw a welcome, if modest, return to net job creation in the second half of 2012. Employer surveys point to this having continued into the New Year, helping to contribute to the headline improvement in the Live Register.
With the long-term unemployed accounting for 44.2% of all Live Register claimants, action to tackle the jobless problem in Ireland remains a top priority for policymakers. One approach to this is through Activation programmes. Data to end-February contained within today’s release show that 83,421 people were availing of those programmes at that time, which represents an annual increase of 3.9%. However, given the scale of the problem it is no surprise that yesterday the IMF called on the government to refocus policies designed to assist the long-term unemployed.
In all, today’s employment data contain few surprises. The stabilisation of the economy over the past year has helped to initially arrest, and now has begun to reverse, the rise in the numbers of people out of work. However, as the pace of improvement remains modest, we are unsurprised to see continued numbers exiting the labour force, as evidenced in the latest QNHS.
Elsewhere, industrial production increased marginally (0.2%) in February. On a year-on-year basis, production was 0.1% higher.
In terms of sectoral performance, the “Modern” sector increased 0.7% (-0.2% y/y) during the month, while the “Traditional” sector was flat (both on a monthly and annual basis).
Within the “Modern” sector, there were divergent trends as production in chemicals and pharmaceuticals declined 1.3% m/m (driven by a 2.6% fall in basic pharma volumes) while computers and electronic products increased 8.3% m/m. The computers and electronic products segment is quite volatile and we note that the 8.3% m/m improvement consisted of a 42.7% increase in computers and a 11.2% decline in electronic components (which have been persistently weak since the beginning of H2 2012).
Production in the more labour-intensive “Traditional” sector, which employs c.2x that of the “Modern” sector, was boosted by a solid performance in the food and beverages sector (+1.3% m/m; +4.1% y/y).
In all, industrial production has recovered 8.9% since the steep pharma-driven fall-off in September (when a 22.8% fall in “Modern” sector production pushed total industrial production down 14.3%). With data available for two-thirds of the first quarter, and bearing in mind the usual disclaimers that apply to industrial production data (i.e. the potential for volatility and revisions to prior data in March), it appears that Q1 2013 is running c.3% ahead of Q4 2012, driven primarily by the relative improvement in pharmaceutical volumes (which have recovered 31.0% since September).