A sharp slowdown in the growth of number of people employed was recorded in the fourth quarter of 2015, according to Central Statistics Office figures out today.

The CSO estimates that seasonally adjusted employment increased by 4,700 over Q3. Through 2015, there were much larger increases of 9,600 in Q3, 16,000 in Q2, 14,300 in the first quarter of 2015. In Q4 2014, the quarterly increase was 14,700.

According to the CSO's measure, the adjusted unemployment rate declined from 9.2% to 9.1% for Q4 2015, down by just 1,700 in three months.

However, 44,100 more people were in work in Q4 2015 compared to a year earlier, an increase of 2.3%. Most of these were women, at 25,200, while 18,900 more men were at work. The CSO said that quality of employment also improved, a conclusion which economist Philip O’Sullivan of Investec agreed with.

High Quality

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According to O'Sullivan: “We note the ‘high quality’ nature of employment growth as reflected in the data. While headline employment rose 2.3% in the year, full-time employment rose 2.6% while part-time employment increased by a more pedestrian 1.2%. Within the part-time data, we note that the number classified as ‘part-time, not underemployed’ has increased from 330,900 to 347,500 over the past year, while the number classified as ‘part-time, underemployed’ has fallen from 115,500 to 104,000 over the same timeframe.”

Finance minister Michael Noonan (pictured) welcomed the figures. “More people are now at work than at any stage since 2009, with some 142,000 jobs created since the trough of the crisis. In parallel, the unemployment rate has fallen for ten consecutive quarters. It’s a is a clear sign of economic recovery”, he said, “and today’s figures provide ongoing evidence that government policies are driving a broad-based labour market recovery, with growth recorded in 12 of the 14 sectors.”

Minimum Wage Hike

The levelling off in jobs growth is most likely connected to the government's decision to add 50c an hour to the minimum wage from January 2016. Retailers warned that the NMW hike would dampen their hiring policies in the short-term, especially as the winter months after Christmas are slow in most retail sectors.

KBC Bank economist Austin Hughes noted that in Q4 employment in Industry fell 5,500 (-2.2%) for the weakest quarterly performance in this sector since the third quarter of 2009. Jobs in Agriculture dropped by 3,700 (-3.3%), the poorest outturn in that area since the start of 2014.

According to Hughes: “The sharp drop in employment in industry may be partly related to a significant drop in food production in late 2015, while the drop in employment in agriculture might owe something to severe flooding during the quarter. However, we don’t think these are adequate explanations for the scale of decline reported in these areas in late 2015.

"At this point we would speculate that these particular results likely owe more to statistical ‘noise’ than to any definitive signal of a softer trend in job creation of late. In the same vein, a 7,100 increase (+5.2%) in employment in accommodation and food services may reflect a correction of excessive weakness reported in earlier quarters' results."

Services Growth

Ulster Bank economist Simon Barry noted that available evidence from the employment indices of the PMI surveys (to January) points to a continuation of solid private sector jobs growth in the near term, arguing against a negative interpretation of the Q4 figures.

According to Barry: “In Q4 there was a notable pick up in the Services area, where year-on-year jobs growth rose to a two-year high of 1.8%, reflecting buoyancy in a number of areas including hospitality, healthcare, transport, wholesale and retail.”

Barry noted that there is considerable variation in jobless rates across the country: the South-West had the lowest unemployment rate in Q4 at 7.4% while the South-East has the highest at 11.9%.

He added: “Analysis of regional population trends again highlights the particular strength of population growth in Dublin (+31,000 y/y to Q4), and suggests that demographics are a source of strong underlying demand for housing in the capital.”

Jobless Rate 8.9%

An increase in labour force participation, allied to the slightly slower pace of jobs growth, means that the monthly unemployment rates for late 2015 and early 2016 have been revised up from previous estimates by the CSO. The February 2016 jobless rate now stands at 8.9% rather than the previous 8.6%.

Pic: Sam Boal/RollingNews.ie