Home > Uncategorized > Good but (very) puzzling news from Ireland

Good but (very) puzzling news from Ireland

Austerity watch:

Today, the Irish statistical institute published data on employment growth in Ireland: a solid +3%, year on year. This news is about as good as it can be.

However.

It is puzzling. Very puzzling. Such rates of employment growth are normally consistent with economic growth of 4 to 5% and, during a recovery, even with rates of 5 to 6% as companies at first can use existing ´slack´ to cater to additional demand.

And there isn´t even a recovery, in Ireland. The GDP data for the third quarter are not yet in but second quarter growth was still down -1,1%, Year on year. Also,

A) Households are still deleveraging (net household debt is decreasing at a high and steady -4,5% a year)

B) Non-financial companies are still deleveraging  (at a high and steady -5% a year)

C) The change of the services index has been quite negative during the third quarter

D) The same for industrial production

E) As well as net exports of goods

F) While retail sales are (except for cars, which are however not produced in Ireland) sluggish

G) Almost half of the increase is caused by a whopping 30% increase of employment in agriculture (a sector which has been shedding labour for the last sixty years).

H) While industry showed a less inconceivable but, considering the YoY decline of production, quite high +7% rate of employment growth.

So, I am puzzled. Even when the economy did well during the third quarter this growth of employment is consistent with an absolutely massive deterioration of sectoral productivity in industry and agriculture. By the way, the CSO does warn that the agricultural data are not dependable.

  1. F. Beard
    November 26, 2013 at 9:02 pm

    Even when the economy did well during the third quarter this growth of employment is consistent with an absolutely massive deterioration of sectoral productivity in industry and agriculture.

    So the Irish have been driven back to picking potatoes by hand? Because labor is now cheaper than machines?

    I would fear to be a banker or Irish politician if so.

    I wonder what insane logic drove the victims of the French Terror to their doom circa 1793?

  2. Cesar
    November 26, 2013 at 11:34 pm

    1,700 people a week are emigrating from Ireland, which probably “helps” the figures. . .

  3. Mike Hall
    November 27, 2013 at 10:30 am

    Net emigration according to Eurostat was about 35,000 in 2012. Probably similar in 2013. I suspect, besides the dodgy agriculture sector figures, that Ireland is following the UK model with more part time or variable income jobs like zero hours contracts.
    I live in Ireland and there is very little sign of improvement. Most would describe the situation as stagnation.
    Have to wonder about the official figures tho’. Not as if corruption, cronyism and simple incompetence at the highest levels are any stranger to the country.

  4. November 27, 2013 at 11:27 am

    The CSO (national statistical agency) warns against reading too much into trends as they are re-aligning sampling base with recent census. This has led to artificially inflated numbers in the agricultural and self-employed sector. The number of employees has increased by 1.4% and over 70% of this increase is in the Accommodation & Food Services sector, with some increases in Manufacturing and Professional & Scientific sectors. Most NACE categories are still registering a decline. In addition, weekly earnings are still falling while over one-in-seven of those aged between 15-29 years have emigrated due to the recession.

    We won’t get a sense of the real trend until next year – after the CSO concludes its statistical re-alignment. The trend and average will level off with the Government projecting that the employment rise next year will be less than this year. What is happening now is a) some employment rise after years of depressed demand (Ireland is still in a domestic-demand recession); and b) statistical adjustments.

    To put it in perspective, on current trends, employment will not return to pre-recession levels until after 2020.

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