strategy statement03 - 05

Looking in more detail at recent employment trends, it is clear that Ireland experienced phenomenal overall employment growth during the 1990s. In the period 1993 to 2000, employment grew by an average of 4.7 per cent per year. The number of persons in employment increased from 1.15 million in 1993 to 1.65 million in the first quarter of 2000, an increase of half a million (43 per cent). This was completely unprecedented in Irish economic history and was outstanding within the EU. Unemployment (on an ILO basis) fell from 15.9 per cent in 1993 to less than 4 per cent in 2001. Employment levels continued to grow to a total of 1.75 million people in the first quarter of 2002, and reached 1.77 million people by end-year.

Full-time employment increased by almost 50,000 per annum between 1994 and 2001, while part-time employment grew by 21,000. However, over the period 1994 to 2001, part-time employment grew at a rate of close to 11 per cent a year, compared to a rate of just over 4 per cent for full-time employment.

The rate of female labour force net participation has grown more rapidly than the male participation rate. From 1994 to 2001, the number of females in the labour force increased by over 55%, rising from 453,200 to 702,500. The number of males in the labour force increased by a similar overall amount, rising by about one third to slightly over one million1. Female employment grew by an annual average rate of over 6.4 per cent between 1994 and 2001, compared to growth of almost 4.2 per cent for male employment.

Recent less favourable economic conditions have led to an inevitable disimprovement in employment performance. Data for the fourth quarter of 2002 show a year on year increase in numbers employed of just over one per cent. However, this signifies a slowdown in the employment growth rate, down nearly two points from the growth rate of 2.9 percent recorded a year earlier.

1 Comparing data from Labour Force Survey (April 1994) and Quartely National Household Survey, Quarter 2, 2001.

The unemployment rate increased from 3.7 per cent in the first quarter of 2001 to 4.4 per cent in the first quarter 2002, since rising slightly to 4.6% in the first quarter of 2003. There was also a corresponding rise in the number of long-term unemployed, the first such increase since 1998. The number of people unemployed for a year or more was up by 3,300 to 26,400 in the year to Q1 2003. Despite this increase, the long-term unemployment rate of 1.4 per cent is still extremely low both by historical and international standards.

The downturn in the labour market can also be seen in trend data for notified redundancies. After almost two decades of relative stability the trend has turned markedly upwards for the past two years with the number of notified redundancies in 2001 up 49 per cent on 2000. There were over 25,300 notified redundancies in 2002, an increase of almost 28 per cent on 2001. 2002 had the highest number of notified redundancies since 1984.

Results from the FÁS/Forfás/ESRI survey of employers’ vacancies2

carried out in the first quarter of 2002 highlight how the recent slowdown has affected employer’s demand. The survey shows a drop in the percentage of firms reporting vacancies. Only 21 per cent of firms had vacancies in the 2001/02 survey compared to 31 per cent in the previous survey in 1999/2000. The majority of the vacancies were in intermediate and lower skilled grades in the economy – e.g. Skilled Maintenance & Skilled Production and Clerical & Secretarial. Professional occupations, on the other hand, represent only a small share of the total number of vacancies. However, the vacancy rate for Science Professionals, along with Science Technicians and Other Associate Professionals (e.g. industrial designers and technical inspectors) actually increased in the last two years.

Figures from the May 2002 IBEC/ESRI Monthly Industrial Survey would seem to confirm that employers’ recruitment demand has been weakening. According to the survey, there has been a dramatic reduction in the prevalence of labour shortages over the last two years, with only one per cent of manufacturing firms surveyed saying that production was being constrained by labour shortages.

2 Williams J, and Hughes G., National Survey of Vacancies in the Private Non-Agricultural Sector 2001/2002, FÁS/Forfás/ESRI.