Showing posts with label Irish employment. Show all posts
Showing posts with label Irish employment. Show all posts

Tuesday, July 31, 2018

30/7/18: Broader Unemployment vs Official Unemployment: Ireland



In the first post (see above) looking at the broader measures of unemployment and dependency ratios, recall that CSO publishes several extended series for broader unemployment rates. 

The official unemployment rate at 1Q 2018 stood at 6.4 percent (well within the pre-crisis historical range of the average of 5.31 percent and the 99% confidence interval of (3.70%, 6.92%). In more simple terms, statistically, the current official unemployment rate is indistinguishable from the average rate prevailing in 1Q 1998 - 4Q 2007. Which is the good thing, implying that in official terms, Irelands economy has recovered from the crisis at last. In fact, the recovery in official terms has been attained in 4Q 2017.

However, the CSO also reports the PLS2 measure of broader unemployment. The Above analysis was based on reported PLS1 data, covering unemployed plus discouraged workers, as a percentage of the labour force. Adding to the PLS1 those in potential additional labour force (basically able bodied adults who are neither employed nor unemployed, nor discouraged, and are not in studies or formal training), the CSO gets PLS2 measure of broader unemployment. In 1Q 208 this number read 10.2% of the Labour Force, plus Potential Additional Labour Force, which was statistically higher than the pre-Crisis average of 6.1% (falling into the 99% confidence interval range of (4.39%, 7.81%). In other words, the economy has not yet recovered from the Crisis based on PLS2 broader unemployment measure.

Extending PLS2 to cover all unemployed, plus those who want a job and not seeking for reasons other than being in education or training, in 1Q 2018 the broader PLS3 unemployment measure stood at 14.2 percent, unchanged on 4Q 2017. As with PLS2, the 1Q 2018 reading for PLS3 falls well beyond the range of the pre-crisis historical average of 8.36% (with 99% confidence interval of (6.52%, 10.20%).

As noted above, by two broader unemployment measures: PS2 and PLS3, Irish economy has not recovered from the crisis, even if we take a relatively benign recovery measure of the economy reaching the pre-crisis 1Q 1998 - 4Q 2007 average rate of unemployment. 



Worse, taking 4 year moving average and a 4 year rolling standard deviation in PS3 rates, 1Q 2018 PLS3 rate of 14.2% is closer to the upper margin of the 99% confidence interval for 1Q 2018 based on prior 4 years of data (the CI is given by (9.81%, 15.63%) range). Which means that 1Q 2018 data shows no statistically significant break-out from the PLS3 broader unemployment dynamics of the past 4 years. The same holds for the 5 years MA and rolling STDEV. 

So while the official unemployment readings are showing a very robust recovery, broader measures of unemployment continue to trend in line with the economy still carrying the hefty legacy of the recent crises. 

Saturday, June 20, 2015

20/6/15: Irish Employment by Sector: Latest Data


Here are the latest stats for Irish employment across sectors, based on the EHECS Earnings Hours and Employment Costs Survey Quarterly reported by CSO:


Overall, there were 1,574,800 people employed across all sectors of economy in 1Q 2015, which represents an increase of 2.67% y/y. In 4Q 2014 y/y rise was 2.33%. Current level of employment is 9.9% below 1Q 2008, but since 1Q 2011 (during the tenure of current Government) the economy added some 59,700 jobs - a rate of jobs creation of 14,925 per annum. The rate of jobs creation did accelerate in the last twelve months: between 1Q 2013 and Q1 2014, the economy added 26,800 jobs and between 1Q 2014 and 1Q 2015 it added 41,000 jobs. Nonetheless, compared to 1Q 2008 there were 192,400 fewer workers in the economy at the end of 1Q 2015.

Here is the summary of changes (%) between 2008 average (do note this), 1Q 2014 and 1Q 2015 by sector:


Our 'smart' and 'knowledge' economy currently operates at employment levels in Information & Communication sector of some 59,800 (quite low, surprisingly, given the hype about the sector growth). And this represents an increase of only 1,800 (+3.1%) y/y, and a drop on 1Q 2008 levels of 5,000 jobs. Another category of 'smart'/'knowledge' workers is Professional, scientific and technical activities. Here things are even worse. Total level of employment in this category at the end of 1Q 2015 stood at 79,000, which represents a drop of 5,100 y/y (-6.1%) and a decline of 2,600 on 1Q 2008.

This dovetails with the evidence on STEM-related employment presented here: http://trueeconomics.blogspot.ie/2015/06/20615-stem-to-bull-time-to-rethink.html

Overall, only two areas of activity have managed to post higher 1Q 2015 employment levels than 1Q 2015: Education (+3,900) as well as Human Health and Social Work (+19,000).



Thursday, November 27, 2014

27/11/2014: QNHS Q3 2014: Full-, Part-Time and Underemployed



Key summary of the previous posts covering QNHS for Q3 2014 is provided at the bottoms of the post.

In this post, lets take a look at labour force breakdown by employment status.

For all persons aged 15 and older, 1,860,000 were classified as at work in Q3 2014, up 1.7% (+31,000) on Q3 2013 and up 3.25% (+58,500 on Q1 2011).

Of the above, 1,453,000 were in full-time employment, which represents an increase of 2.07% y/y (+26,100) and an increase of 5.2% (+70,000) on Q1 2011.

Part-time employment numbers rose to 387,000 or +0.6% y/y (+2,300) and their numbers were up 1.58% (+6,000) compared to Q1 2011. Of these, numbers of those claiming not to be underemployed rose 6.25% y/y (+16,100) and were up 3.36% (+8,900) on Q1 2011. In employment but underemployed numbers were down significantly in Q3 2014, falling 10.84% y/y (-13,700) and by 2.42% (-2,800) on Q1 2011.


As the result of the above changes, full-time employment as the share of total employment rose to 78.1% in Q3 2014 compared to 77.9% in Q3 2013. This is still well below the historical average of 83%.


Key conclusions: Both full-time employment and total employment accelerated in Q3 2014 compared to Q4 2013-Q1 2014 dynamics, with most of the new jobs creation taking place in the category of full-time employment. Numbers of underemployed individuals fell. Which is very good news. However, as the proportion of total employment, full-time employment remains at the low levels.



Summary of previous posts:

  1. Unemployment is falling across all durations and all demographic (age-defined) cohorts, but the pressure of long-term unemployment is rising in the cohort of older workers (40 years of age and older), 
  2. Irish economy added 27,600 jobs in a year though Q3 2014 compared to Q3 2013. but only 17,300 of these jobs were private sector non-agricultural jobs. On longer-term trend: Non-agricultural Private Sector employment in Q3 2014 was 13.83 lower than 2008 average and Agricultural employment was 4.9% lower. In contrast, Public and State-controlled Sectors employment in Q3 2014 was 3.56% higher than 2008 average. 
  3. Ireland's participation rate remains below historical average and despite a slight improvement in Q3 2014 compared to Q2 2014, labour force participation rate remains lower than for the same period in 2013. 
  4. Total population over 15 years of age increased by 0.08% y/y and population at work was up 1.7% y/y (+31,000), marking a slowdown in the rate of growth from 2.17% y/y in Q2 2014 (+39,100). Numbers of those retired from employment rose to 416,700 - up 2.76% (+11,200) y/y and up 68,400 or +19.64% since Q1 2011. Q3 2014 dependency ratio was 40.34 individuals at work to 59.66 individuals not working for various reasons and remains higher than historical average. 

Wednesday, November 26, 2014

26/11/2014: QNHS Q3 2014: Employment by Broader Sectors

In the previous post I covered the issue of unemployment duration and distribution of long-term unemployment by age cohorts (see http://trueeconomics.blogspot.ru/2014/11/26112014-qnhs-q3-2014-long-term.html).


So now, lets take a look at the sectoral distribution of jobs in the economy.

Across all economic sectors, employment numbers rose in Q3 2014 to 1,926,900 - a rise of 1.45% y/y (+27,600) which represents a slowdown in the rate of growth compared to Q2 2014 when employment expanded by 1.7%.

On a 4 quarters average, current employment levels are at 1,906,630 and this is 2.18% ahead of the 4 quarters average for the period through Q3 2013.

All good. Catch is: we are still only at slightly above Q4 2009 levels in terms of overall employment and are down 3.48% on the highest level recorded during the current crisis period. Overall levels of employment are still 9.47% below the 2008 average levels.

As I noted in previous post, there are good reasons to look at the non-agricultural private sector employment as core indicator for economic activity. Here, Q3 2014 level of employment is at 1,325,500 which is 1.32% (or 17,300) ahead of Q3 2013. The rate of employment growth in Q3 was also slower than in Q2 (1.68% y/y). Q4 2013-Q3 2014 average is at 1,302,900 which is 1.87% ahead of Q4 2012-Q3 2013 average.

Our jobs markets performance was fairly positive compared to 2010-present average as shown in the chart below, but much of this positive performance disappears once we take out public sector and agricultural jobs from the equation.

So in the nutshell, Irish economy added 27,600 jobs in a year though Q3 2014 compared to Q3 2013. but only 17,300 of these jobs were private sector non-agricultural jobs.



Agricultural employment grew by 6.19% y/y in Q2 2014 and it shrunk by 0.81% (-900) in Q3 2014. Nonetheless, 4 quarters average currently stands at 111,700 which well ahead of the 4 quarters average through Q3 2013 which stood at 100,050.

Public and State-controlled sectors employment (basically state services, health and education) stood at 491,700 in Q3 2014, representing a rise of 2.33% y/y. In Q2 2014 sector employment rose 0.8% y/y. This is one of the few sectors (and the only one of the key three super-sectors identified here) that posted accelerated growth in employment in Q3 compared to Q2. Average for the four quarters through Q3 2014 stands at 492,030 which is 1.05% higher than the average for the four quarters through Q3 2013.



Let's take a different look at the numbers. Non-agricultural private sector employment in Q3 2014 was 13.83 lower than 2008 average. All employment was 9.47% lower and Agricultural employment was 4.9% lower. In contrast, public and state-controlled sectors employment in Q3 2014 was 3.56% higher than 2008 average.

Table below summarises changes for broader set of sectors.


Monday, July 21, 2014

21/7/2014: Why a Wave of Low-Pay Public Sector Jobs Applications?


Employment stats and claims have puzzled many in recent months. Government claimed variable numbers at different points in time, ranging between jobs created at 61,000 to 67,000 and so on. Much analysis has been provided of these claims and other numbers on this blog and many other, often divergent, often close-enough and so forth. All, however, points to the fact that jobs are being added in the economy and that at least some of the declines in unemployment rate are down to new positions being posted and filled.

Which raises a hugely surprising question: if private sectors jobs are being created, why is there such a huge surplus of unemployed applying for jobs in the private sector? Evidence of the latter is not systematic and not regular, but here is one snapshot: http://www.independent.ie/irish-news/news/28500-scramble-for-civil-service-jobs-at-11-an-hour-30444949.html

Note that the public sector jobs being rushed-at are not at the top or even the middle of pay & perks distribution. These are roughly EUR11/hour jobs, at the bottom of the career ladder and the recruits face the prospect of:

  1. Higher taxes,
  2. Lower non-wage benefits, 
  3. Increased workloads (compared to the incumbents and past employees), and
  4. Prospect of slower career progressions (early retirements took out a large share of senior employees and their positions are being filled internally, without any prospect of younger recruits qualifying for them).
One answer is that for all the changes in employment stats we had over the recent months, we still have huge levels of unemployment and underemployment as the legacy of the crisis. On underemployment side, take the percentages of workers in working less than full-time hours as a share of total employment pool. In Q1 2008, 7.5% of all workers in employment worked less than 20 hours/week, in Q1 2014 the percentage was 8.1%. Over the same period of time, % of workers working 20-29 hours per week rose from 10.9% to 12.8%, percentage working 30-34 hours per week rose from 4.3% to 4.5%. Percentage of workers working more than 35 hours per week dropped from 66.4% to 61.9%. Counting in those working less than full-time hours and those on variable hours, 38.1% of our employment pool are not in full-time employment against 33.6% back in Q1 2008. 

In Q1 2008, there were 113,600 individuals who considered themselves underemployed, in Q1 2014 the number was 258,100. And there are 46,500 more people who are working part-time and consider themselves underemployed today compared to Q3 2008 (earliest we have data for), while numbers of working-age adults not in the labour-force are still up 121,300 on Q1 2008.

And in the core age categories, applying for these jobs, the percentage of 15-24 year old unemployed relative to total population of that age group was 9.58% in Q1 2008. This stood at 25.31% in Q1 2014.

In other words, it is easy to forget that things are still very ugly when it comes to employment situation in Ireland.

Saturday, May 17, 2014

15/5/2014: Innovation, Employment & Growth: Ireland's Human Capital Dilemma


This is an unedited version of my article for Sunday Times, April 06.


From jobs programmes aiming to boost employment creation to entrepreneurship strategies and to solemn promises to unlock credit supply and investment for indigenous innovation-based enterprises, Irish SMEs have been basked in the public policy sunshine.

Much of this attention is cross-linked to another public policy fad, Ireland’s long-running obsession with innovation and R&D. In 2013, amidst continued borrowing for day-to-day operations from the Troika, Irish State spent EUR773 million on supporting research and development activities in academia and industry. Of this, a good portion was targeted to fund R&D and other innovation activities linked to Irish indigenous SMEs.

There are three basic problems with all this policies activism. One, we have no idea as to what sort of financial returns this public investment generates to the taxpayers. Two, we have virtually no coherent and independently verified evidence that the innovation-focused SMEs are delivering any serious economic returns in terms of real jobs creation and income generation. Three, we have no proof the state-funded innovation is a right model for SMEs growth generation in the first place.


Enterprise innovation is a weak spot for Ireland. Indigenous patent applications reported in July last year by the Patents Office and covering full year 2012 stand at decades low. Monthly data from the New Morning IP – an Irish consultancy dealing with issues of intellectual property – shows that in 2013 indigenous patents applications fell even further, down by almost 3 percent year on year.

Back in 2006, the national strategy for science set 2013 as the target date to deliver a 'world class knowledge economy'. Since then, numbers of indigenous patents filed under the Cooperation Treaty and to the European Patent Office have declined.

And the problem reaches beyond our SMEs. For example, per IDA own figures, only 28 percent of agency clients have spent more than EUR100,000 per annum on R&D. In other words, nearly three out of four MNCs had, de facto, nil research activity here.

The university sector is the cornerstone of Irish Government's vision for delivering an innovation-focused SMEs culture. Sadly, our best universities are barely visible on the radar of international rankings. Ireland’s top university currently ranks only 61st in the QS Top University league table and 129th in the Times Higher Education (THE) rankings. Trinity ranks 55th in Arts & Humanities – an area that receives absolutely zero attention from the likes of IDA and Enterprise Ireland and is firmly placed outside our economic development policy umbrella. TCD ranks 81st in engineering and technology, 83rd in life sciences and medicine and 136th in natural sciences. All of these areas are focal points for R&D spending and feed into state enterprise supports systems. UCD is no better: ranked 139th in the world under QS criteria and 161st by the THE rankings.

By pretty much every possible metric, our innovation engines are not firing.


Meanwhile, enterprise formation, an area that should be a core priority for the Government that is allegedly focusing on entrepreneurship and jobs creation, is lagging. Irish start-ups rates, relative to the economy size, are low today and have been low even in the days prior to the Great Recession.

Based on the OECD statistics, despite years of booming ICT services and substantial growth in the IFSC, Ireland today shows relatively static number of enterprises trading in market services, and declines in the number of enterprises working in manufacturing and industries, excluding the construction sector.

Late last year, OECD published its Economic Survey of Ireland. The document recommended empirically founded approach to enterprise and innovation supports. OECD noted that over-proliferation of funding agencies and programmes is yet to be scaled back. Per OECD, Ireland has over 170 "separate budget lines… and 11 major funding agencies involved in disbursing the Science Budget". Meanwhile, the Government continues to add new ones, seemingly with little regard for their effectiveness. Not surprisingly, there is no evidence on systematic and independent evaluation of these programmes effectiveness. And there are no continuously reported return metrics relating to state investments in enterprise development and innovation.

Instead of real statistics, often misleading and highly aggregate numbers are being put forward as markers of success. Jobs commitments and gross jobs additions are presented as signifiers of major breakthroughs, without independent audits. Companies’ registrations rates are reported as being equivalent to start up rates and no central data reporting is provided for actual enterprise formation. Take for example a jump reported in new companies registrations in Q1 2014 when 10,741 new companies were entered into the register, marking a 6% rise year on year. This number included 3,989 limited companies - the third highest rate of new limited companies registrations for the first quarter over the last 10 years.

Sadly, these headline statistics tell us preciously little about the underlying dynamics of companies formation. For example, how many business restructurings completed in 2012-2013 are now leading to companies re-registrations? How many of the businesses launched in previous years survive? How many of businesses launched are actively trading in the real economy? We simply do not know.

Focus on top-line reporting metrics, such as aggregate numbers of companies registered, VC funds disbursed, R&D budgets spent, obscures the woeful lack of coherent policies supporting indigenous enterprises formation and growth. As the result, beyond the areas of ICT services, biotech and medical devices, we neither foster formation of micro enterprises nor help smaller companies to reach 'medium' size. And, via tax and compliance measures, we actively penalize self-employment – the source of much of the early-stage entrepreneurship.


Promoting real innovation and enterprise cultures requires supporting investment ecosystem and entrepreneurial risk-taking. These goals can only be achieved by lower taxation, especially via lower CGT and income tax, and a benign and highly efficient personal and business insolvency regime. These are not priority areas for the Government.

However, tax policies mix is a necessary, but not a sufficient condition for success. To further promote real enterprise growth, we need to stop fetishising scientific R&D-driven enterprises and ICT and refocus public funding toward more evidence-based enterprise development projects.

International research shows that ordinary and traditional sectors SMEs drive growth in jobs and income. Where traditional sectors are put onto exporting paths, these SMEs can drive exports growth as well. In contrast, high performance start-ups in ICT services, usually focused directly on exports markets, are less employment and income-intensive. ICT does contribute strongly to productivity growth and is a nice niche business to have on offer for investors, but as McKinsey recent research pointed out, tech innovation business is unlikely to fulfill the economy-wide hunger for jobs, especially jobs for the indigenous workforce.

Focusing on active training for entrepreneurship and mentoring of new companies is another necessary addition to the policies mix that is currently being sidelined in favour of populist drive for state investment and R&D funding. One key area where we are lacking in supports is access for entrepreneurs to legal, tax and financial advice. Costs of tax and legal compliance and structuring are unbearably high for younger companies and for smaller enterprises considering growth strategies. These costs crowd out funding available to companies to finance further development, hiring, as well as cap companies growth potential.

On investment side, we have a thriving culture of VCs chasing the 'next Facebook'. Over 90 percent of all VC funding extended in Ireland goes to finance ICT start-ups, with more than two-thirds of this going to ICT services companies, as opposed to physical technologies.  We also have over 75 incubators and accelerators, with the vast majority of these being state-owned and/or state-funded. These too focus almost exclusively on companies working in ICT, biotech and other lab-linked innovation sectors.

But we have no idea as to the effectiveness of this strategy. Numbers employed in core ‘knowledge economy’ sectors have grown by about 4,900 from the onset of the crisis through 2013. All of this growth was down solely to ICT jobs which added 9,125 new employees, while professional, scientific, and technical activities employment, excluding education sector, is down 4,225 on 2008. Adding up jobs creation reported by the MNCs from 2008 through present, it is highly likely that indigenous employment in professional, scientific, technical, and information and communication sectors has probably shrunk.

Looking at the overall landscape of enterprise formation here, we do know that with exception of Ryanair, CRH, Paddy Power and a handful of other flagship companies, no Irish SME has grown beyond the 'medium' level threshold. The magic target of exceeding EUR20 million in annual sales - set in the Enterprise Ireland 2005-2007 strategy plan has vanished, unmet.

Put simply, Irish indigenous companies are not getting smarter with billions of public funds invested in SMEs-targeting R&D activities and ventures over the years. At the same time, Irish SMEs are not growing in size either. Micro enterprises show some progression toward becoming small firms, but small firms show little dynamism upward and medium-sized companies are stuck with no capacity to break into the big firms league. The system is broken and incremental policy adjustments are not holding a promise of a solution. We need to go back to the drawing table on enterprise policy in Ireland.



Box-out: 

Recent research from the US, published by the National Bureau for Economic Research looked into sell-side equity analysts' ability to predict equity prices and the impact their predictions have on market valuations over the period of 1983-2011. Controlling for a wide variety of factors that routinely influence forecast errors, the study has found that at the times of the crises sell-side analysts forecasting accuracy deteriorates by up to 50 percent relative to normal. And just as analysts’ errors explode, their influence rises as well. In particular, forecasts that upgrade outlook for companies amidst the falling market tend to carry the greatest weight of public attention. Optimism pays, even if only for analysts’ employers. Which, of course, creates a powerful incentive for sell-siders to ‘talk up’ equities just around the time of the worst bear market. Lastly, the study found that at the time of financial crises, marketing efforts by sell-side analysts tend to increase, in part due to greater pressure on them to perform, in part due to expanded opportunities for being ‘heard’ by investors.

John Kenneth Galbraith thought that "The conventional view serves to protect us from the painful job of thinking." In the case of sell-side analysts musings on the crises, that might be not a bad alternative.




Wednesday, March 5, 2014

5/3/2014: Broader Measures of Unemployment in Ireland: QNHS Q4 2013


Completing the coverage of Q4 2013 QNHS results for Ireland.



Now, let's take a look at broader measures of unemployment.

Methodology note: CSO reports the following measures of broader unemployment:

  • PLS1 indicator is unemployed persons plus discouraged workers as a percentage of the Labour Force plus discouraged workers. This indicator is broadly comparable to the previously published S1 indicator. In the nutshell, PLS1 = unemployed persons plus discouraged workers.
  • PLS2 = PLS1 + Potential Additional Labour Force
  • PLS3 = PLS2 + others who want a job, not available & not seeking for reasons other than being in Education and training.
  • PLS4 = PLS3 + plus underemployed

In addition, I use CSO data from Live Register and emigration to add two more metrics:

  • PLS4+STP: PLS4 + State Training Programmes Participant
  • PLS4+STPE: PLS4 + State Training Programmes Participants + Emigration

So let's take a look first at labour force. The data is not seasonally-adjusted.

In Q4 2013 there were 2,163,000 people in labour force in Ireland, an increase of 19,600 year on year (+0.9%). A small increase, but a welcome one, suggesting that emigration is not offsetting demographic inflows of workers into the labour force. However, the level of labour force is still below Q4 2011 and is down 137,000 on pre-crisis peak. On average over the entire 2013, levels of labour force were 110,600 behind the pre-crisis period average levels.



As chart above shows, the greater challenge for us is the flat-trending labour force over the period of 2011-2013.

Table and chart below summarise changes in the broader measures of unemployment:




The key takeaway from the above charts and the table is shallower declines in the broadest measures of unemployment officially reported (PLS2-PLS4) compared to PLS1 and the adverse impact of 'sticky' State Training Programmes on the measure. It appears that these programmes are not moving workers out of unemployment fast enough.

Keeping in mind that Emigration is imputed only through April 2013 (we do not have official data beyond that), the PLS4+STP+E measure likely underestimates overall changes in broad unemployment.

Just how bad things are on overall unemployment front? With caveats to data and estimation errors, the above shows that in Q4 2013, 31.7% of Irish potential (including emigrants and state training schemes participants) labour force was either unemployed, underemployed, discouraged from seeking employment, not seeking employment for some reason other than being in education, toiling for free at Job Bridge and other fine 'activation' programmes or 'partying' abroad. Happy times...

That number, incidentally, is down from 32.5% in Q4 2012, but is still above 30.9 in Q4 2011.

Friday, February 28, 2014

28/2/2014: Duration of Unemployment: QNHS Q4 2013


Continuing with the coverage of Q4 2013 QNHS results for Ireland:
- First post covering detailed analysis of employment by sectors: http://trueeconomics.blogspot.ie/2014/02/2722014-employment-by-sectors-qnhs-q4.html
- Second post covering employment across broader sectors and categories: http://trueeconomics.blogspot.ie/2014/02/2822014-new-employment-across-broader.html
- Third post covering Participation and Unemployment Rates: http://trueeconomics.blogspot.ie/2014/02/2822014-participation-and-unemployment.html

In the current post let us consider changes in duration of unemployment.

The CSO reports two basic duration metrics:
- Less than 1 year,
- 1 year and over
And the data covers different age groups:
- All population 15 years and older
- Population 15-24 years of age,
- Population 25-44 years of age, and
- Population 45 years of age and older.

Here are the charts and quick commentary on these. The data is not seasonally-adjusted, so there is a lot of volatility and I am not going to do q/q analysis here.

For overall population 15 years of age and over:

  • Q4 2013 total unemployment declined 14.05% (41,400 in level terms) compared to Q4 2012. In 2012, Q4 y/y decline was -6.1% (-19,300 in level terms). Thus, 2013 numbers are much better compered to 2012 numbers, as one should expect.
  • Of these, unemployment numbers for duration less than 1 year have declined 18% (-20,900) in Q4 2013. Te good news - this reversed 2012 y/y rise of 2.0% (+2,300).
  • Unemployment with duration over 1 year has fallen as well, in Q4 2013 this was down 11.8% (-20,900) compared to Q4 2012, which is a small gain on decline recorded in Q4 2012 (y/y -10% and -19,700).

So good news here is that numbers are declining for both long-term and short-term unemployed. However, while overall unemployment numbers have now fallen to the levels below those recorded in Q4 2009 (though ahead of those in Q4 2008), long-term unemployed numbers are down to the levels below those recorded in Q4 2010 and are way ahead of those in Q4 2009.


Since the current Government came to power (H1 2011), unemployed numbers for those over the age 15 are down 59,300, of which 36,050 declines came from the ranks of short-term unemployed and 22,050 declines came from the ranks of long-term unemployed.

Given the difficulty of reducing long-term unemployment compared to short-term unemployment, this is still a good record.

However, given that we do not know how many of long-term unemployed are gaining jobs vs how many are dropping out of the labour force (emigration or exits from workforce) we really have little to go in identifying how god the above aggregates really are.

Charts below plot unemployment by duration for different age groups.




Youth unemployment (15-24 years of age) is shrinking. Across total youth unemployment, in Q4 2013 numbers unemployed fell 17.3% y/y (down 10,200 in level terms), building on 12.9% (-8,700) decline in Q4 2012.

Compared to H1 2011, youth unemployment is down 19,950 (-29%) overall, with 11,000 of this decline coming from short-term unemployed figures and 8,450 from long-term unemployed ranks.

The problem with the above numbers is that we do not know the sources for these declines in youth unemployment. These, in addition to people gaining jobs, include demographic transition (entry of new young workers and exists of previously younger workers into the next category of 25-44 year olds), exits to and entries from education and training, including State Training programmes, emigration, including short-term migration on post-education visas and so on).

The weakest performance by age group is in the 45 and over category. Here, in Q4 2013 the numbers unemployed declined only 8.6% y/y (down 6,900 in level terms). The good news is that this reversed the rise in unemployment in this category recorded in 12 months through Q4 2012 (+3.0% and +2,300). Compared to H1 2011, numbers unemployed in this age group are still higher (+2.8% and +2,000). Numbers of long-term unemployed dipped in Q4 2013 only slightly (by 6.7% or -3,700) and compared to H1 2011 long-term unemployment in this age category is still up +11.4% or +5,250.

So overall, these are pretty solid numbers,with core reading showing that total number of unemployed for age 15 and over is currently at the lowest level for any Q4 period since (and including) Q4 2009.

Lastly, on severity of long-term unemployment, consider the chart plotting percentage of long-term unemployed in each age group total unemployment numbers:


This clearly shows that since around H2 2012, the positive trends in overall unemployment are broadly translating into symmetric reductions in unemployment for both short-term and long-term unemployed for all age groups. Again, this is a positive trend in the short run, as long-term unemployment is the hardest (or the stickiest) of all forms of unemployment and we can expect an upward trend in these charts. This was indeed the case in the period prior to H2 2012. Since then, however, we are seeing reductions in unemployment of relatively similar proportions for short-term and long-term unemployed.

28/2/2014: Participation and Unemployment Rates: QNHS Q4 2013

Having covered sectoral and broader aggregates QNHS results for employment levels (see post here for links: http://trueeconomics.blogspot.ie/2014/02/2822014-new-employment-across-broader.html), it is now time to take a look at participation rate and unemployment rate.



At the end of Q4 2013, seasonally-adjusted participation rate stood at 60.4%, up on 60.3% in Q3 2013 and 59.8% in Q4 2012. Compared to H1 2011 average (the period when the current Government came to power), the participation rate is up 0.3 percentage points.

Historical average for the seasonally-adjusted rate is 60.77% so we are just a whisker away from hitting this landmark. At the current rate of adjustment, we should be there around Q2-Q3 2014.

At the end of Q4 2013, official seasonally-adjusted unemployment rate fell to 12.1 from 12.7 in Q3 2013 (a very strong decline),  this marks the second sharpest correction downward in unemployment rate for the entire period of the crisis.


Over the year, seasonally adjusted unemployment rate has fallen full 2.1 percentage points from 14.2 to 12.1, improving on 2.0 percentage points decline y/y in Q3 2013. Compared to H1 2011, unemployment rate is now down 2.5 percentage points.

Q4 2013 marks the fifth consecutive quarter of declines in unemployment rate (q/q terms) and current rate is at the levels comparable with Q2 2009. All of which is very good news, despite all the possible caveats to data arising from potential impact of emigration and state training programmes participation (I will be covering these figures in my analysis of broader measures of unemployment as usual, next).

28/2/2014: New Employment Across Broader Categories: QNHS Q4 2013


In the previous post (http://trueeconomics.blogspot.ie/2014/02/2722014-employment-by-sectors-qnhs-q4.html), I covered detailed breakdowns in employment numbers changes across various sectors of the economy. Here, I will briefly identify sub-trends relating to aggregate data.

A caveat: per my discussion before, I will also report here numbers in employment ex-agriculture. In my view, it is questionable as to how agricultural employment is registered in the first place, since many/some of today's famers used to be construction sector employees or self-employed contractors. How many? We do not know. How many claimed unemployment in the past and now, having run-out of benefits, declared themselves to be farmers or farm employees for the purpose of optimising extraction of subsidies or supports? We do not know. Hence, I will omit farming employment from consideration in one sub-set of the aggregate figures (clearly labeled and identified below). This is done not because all of the employment in this sector is somehow 'bad' or 'unproductive' but because

  1. we do not know how much of this employment is real and of what quality, and
  2. employment in agriculture is different in nature (and in valued added) to employment in all other sectors of the economy (this is the reason why many other jurisdictions report non-farm employment numbers and/or private non-farm employment numbers).
Definitions for table and chart below:
  • Non-agricultural Private Sectors include all sectors, with exception of Agriculture, Forestry & Fishing, and Public & State-controlled Sectors Employment (as defined below)
  • Public & State-controlled Sectors Employment covers employment in Public admin & defence, social security (O), Education (P) and Human health & social work (Q). This grouping is not designed to measure public sector employment levels (I will blog on these later separately), but rather identify separately employment in the economy relating to sectors largely controlled by public sector and heavily influenced by state policies on employment and activity.
  • High-value added activities employment covers the following sectors: Information and communication (J), Professional, scientific & technical activities (M), Education (P), Human health & social work (Q), Financial, insurance & real estate (K,L)
Table below summarises changes on H1 2011 average and Q4 2013:

The claim is that there were 60,900 jobs added (employment created) in Q4 2013 compared to Q4 2012. Of these, slightly less than half were added in the private non-agricultural employment sectors (29,600), while Public & State-controlled Sectors employment grew by 4,500 and agricultural employment expanded by 26,800. The numbers are strong and positive.

High-value added sectors of employment showed weaker performance, adding only 12,100 new employees in 12 months through Q4 2013. This, of course, comes on foot of strong performance in 2012, as evidenced by the total number in sector employment rising by 23,600 between H1 2011 and Q4 2013.

Although it is unclear if they include any of the State Training Programmes participants (if they do, as we know they are excluded from unemployment counts), then the numbers are less impressive.

Dynamics across the categories are shown in the chart below:


Dynamics across all aggregates are positive, with exception of the Public & State-controlled Sectors where things are moving sideways. Not quite down significantly and not up. Pick up in non-agricultural private sector employment is weak and unconvincing for now, so it would be good to see steady gains over 2014 in this category.

One thing to keep in mind is that the claimed 61,000 new jobs created is a suspect claim for two reasons:
1) It is subject to modification on the basis of quality adjustments (in part, I will do this when I am reviewing full-time vs part-time employment figures; and in part due to agricultural employment issues highlighted above)
2) The impact of the State Training Programmes, which are for now unknown in terms of how they register in the above data
On the other hands, there have been new jobs added in both higher value-added sectors and in non-agricultural private sectors, as detailed above. This, undoubtedly is a good news.

Stay tuned for more analysis of QNHS data tomorrow.

Thursday, February 27, 2014

27/2/2014: Employment by Sectors: QNHS Q4 2013


Quarterly National Household Survey is out for Q4 2013. Here is the first post looking at the sectoral jobs distribution and jobs 'creation' or rather employment additions.

The next post will cover aggregate employment levels data.

Key to tables below: red denotes reduced numbers in employment in specific sub-sector/sector, green denotes increases in employment. In the tables, I reference current level of employment on H1 2011 average - the period when the current Government came to power.

Table 1:

As the above shows, there was a massive recorded increase in numbers in employment in agriculture. These numbers are driven by the unknown factors, as they are impacted by revaluations applied by the CSO. CSO detail the issues involved with this data in their notes: http://cso.ie/en/media/csoie/releasespublications/documents/labourmarket/2013/qnhs_q42013.pdf
so there is no need for me to go into deep explanations.

Outside Agriculture, Forestry & Fishing, there were modest y/y gains in Construction sector, totalling just 400 jobs. For all the reported activity in the sector - with investors flocking to our shores and building industry posting alleged revivals, there is preciously little to show here in terms of jobs creation since the current Government came to power. Still, good news is that employment is up y/y. May this be a trend, rather than a blip. Construction sector employment has been trending at around Q4 2013 levels since Q1 2011, showing no serious uplifts.

In contrast, Wholesale & Retail Trade, etc sector saw massive drop off in employment, down 3,000 in a year through Q4 2013. The sector is now at the levels last seen in Q4 2004, and Q2 2013 was the second lowest quarterly reading over the current crisis period.

Transportation & Storage sector is basically showing the same signs as Construction sector, with a small rise in employment of just 600 jobs in Q4 2013 compared to Q4 2012. The sector is still down on H1 2011. Q4 2013 marks the second lowest Q4 on record for the period of the crisis.

Accommodation & Food Services sector is gaining jobs at a nice pace. Employment is up 23,150 since H1 2011 and of this increase, 17,400 came in the twelve months through Q4 2013. This is an unambiguous positive, since the sector is now very close to regaining 2007 highs in employment.

Table 2:

As above shows, things are slipping somewhat in the Information & Communication sector, with employment gains since H1 2011 running at a a strong 7,250 on H1 2011, but employment levels down modest 700 jobs in Q4 2013 compared to Q4 2012. Still, Q4 2012 was the absolute record level for employment in the sector, so some retrenchment, especially mild, is ok. The problem, of course, is that this sector is the focal point of all the talk about Irish economy becoming a haven for ICT services jobs. The technical and specialist jobs in this area go into this category, while business services jobs are absorbed into the next two categories.

The above explains why we are witnessing a significant rise in employment in Professional, Scientific & Technical activities sector, where employment rose 11,500 in Q4 2013 compared to H1 2011, and the rise was even sharper (by 13,000) in 12 months through Q4 2013. Very good signal, of course, is that employment in this sector of activities was on a strong rise now since Q4 2011 and we are now just 2,900 jobs shy of the all-time high posted in Q2 2008.

Things were, however, more mixed in Administrative & Support Services sector, where Q4 2013 employment recorded a decent rise of 1,300 jobs compared to Q4 2012, but still posted a loss of 2,600 jobs compared to H1 2011. We are currently running on flat trend from Q4 2009-Q1 2010 albeit with high volatility in the series.

Public Administration & Defence have been shrinking in employment levels, with employment decline of 1,000 in 12 months through Q4 2013. Over the period from H1 2011, employment in this sector is down 6,800, which sounds impressive, as long as we assume that there was no reclassification of employees from this category to other state-controlled or state-related areas, such as Health and Education, Transport etc. I will blog on public sector employment numbers separately, so stay tuned for more analysis.

Education has returned higher employment in Q4 2013 compared to Q4 2012 - a rise of 1,600, but the levels of employment remain lower (by a very small number of 250) compared to H1 2011. It would be interesting to know if the latest changes are driven by private employment, part-time employment or full-time public employment. Alas, we do not have that information.

Table 3

As with Education, Human Health & Social Work also posted an increase in employment over 12 months through Q4 2013, rising by a very significant 3,900. Despite all the 'cuts' talk, sector employment is now 10,400 ahead of where it was in H1 2011.

The chart below summarises the trends in Human Health & Social Work, Education and Public Administration & Defence:


Back to table 3 above:

Industry employment (excluding Construction) rose strongly, some 6,400 in 12 months through Q4 2013, and employment growth is more moderate, at +4,650 when compared against H1 2011 levels. This is good news and confirms my thesis that we are witnessing some (albeit still fragile) organic recovery in the sector.

Services sectors on the aggregate basis posted a rise of 29,300 jobs in 12 months though Q4 2013 and there was a very similar increase on H1 2011 figures.

However, there was strong contraction in employment in the Financial Services, Insurance & Real Estate sector, with employment down 5,300 on H1 2011 and 5,700 on Q4 2012.

In the next post, I will take a look at the Total Employment, Non-Agricultural Employment, Public Sector and State-Controlled Sectors Employment and other core aggregates.

Wednesday, November 27, 2013

27/11/2013: Irish Employment by Sectors: Q3 2013

In the previous post I looked at the data from QNHS on broader measures of unemployment in the economy (http://trueeconomics.blogspot.ie/2013/11/26112013-broader-unemployment.html). This time, let's take a look at employment numbers across various sectors. The data below is not seasonally adjusted, so these are actual counts.

Starting from the top:

  • Overall employment levels at the end of Q3 2013 stood at 1,899,300 which represents a rise of 3.15% y/y. Over the last 12 months, employment averaged 1,865,930 which is 1.54% ahead of employment levels 12 months average through Q3 2012.
  • Relative to pre-crisis levels (average of 2008), employment is still down 10.76%, but compared to the crisis period trough we are up 4.07%.
  • Current levels of employment are the highest since Q2 2010.
  • Agricultural employment changes are well highlighted by the CSO and as such I will not interpret these here.
  • Non-agricultural private sector employment is at 1,308,200 in Q3 2013, up 2.98% y/y. 12 months average level through Q3 2013 is at 1,278,950 up 0.99% on 12 months average through Q3 2012. Not exactly spectacular change, but still a welcome positive reading. Relative to pre-crisis 2008 average, non-agricultural private sector employment was 14.96% lower in Q3 2013.
  • Public sector and state-controlled sectors (health and education) employment fell 0.99% y/y to 480,500. 12mo average through Q3 2013 was at 486,930 which is 0.16% down on previous 12mo average through Q3 2012. Not exactly a massive drop-off. However, compared to 2008 average, employment in this category is 1.2% higher in Q3 2013 - a poor omen for the claims of significant reductions in public and state-controlled employment. 
Chart to illustrate:


Welcoming changes in the higher value-added sectors of the economy:

  • ICT sector employment stood at 82,000 in Q3 2013, up 4.86% y/y. 12mo average through Q3 2013 is at 80,750 and this is up 2.34% on 12mo average through Q3 2012. Levels of employment in the sector in Q3 2013 were 14.77% ahead of 2008 average.
  • Professional, scientific and technical activities employment rose to 113,300 in Q3 2013 up 10.86% y/y and the 12mo average through Q3 2013 stood at 106,350 which is 7.1% higher than in 12 months through Q3 2012. Nonetheless, the sector employment levels in Q3 2013 were 2.22% below the 2008 average.
  • Administrative and support services employment stood at 64,700 in Q3 2013, down 2.85% y/y and 12mo average through Q3 2013 was at 61,350 which is 4.66% below the average through Q3 2012. The sector employment is still well below 2008 levels - down 15.73%.
  • Financial, insurance and real estate services employment fell 0.78% y/y to 101,500 in Q3 2013 and 12mo average through Q3 2013 was at 100,730 down 0.93% on 12mo average through Q3 2012. Compared to pre-crisis levels (2008 average) employment in this sector is down 5.10% in Q3 2013.


Education, Health and Public Administration all showed continued weaknesses:

  • Public administration and defence, compulsory social security sector employment declined 3.61% y/y to 96,100, and 12 mo average through Q3 2013 stood at 95,600 or 4.66% lower than over 12 months through Q3 2102.Relative to 2008 average, employment in the sector is now down 8.63%.
  • Education sector employment rose 0.14% y/y to 140,800. Sector employment averaged 145,980 in 12 months through Q3 2013 which is 1.02% ahead of 12 months average through Q3 2012. However, compared to 2008 average, Q3 2013 level was 3.13% lower.
  • Human Health and Social Work sector employment was down 0.57% y/y in Q3 2013. 12mo average through Q3 2013 stood at 245,350 which is 0.99% higher than 12mo average through Q3 2012. Compared to 2008 average, Q3 2013 reading was 8.62% higher.


Employment in Industry is quietly running slightly up despite overall decline in goods exports values:

  • Industry ex-Construction sector employment rose 4.72% y/y in Q3 2013 to 242,000 and was up in 12mo average terms by 1.3%. However, compared to pre-crisis average for 2008, Q3 2013 reading was still 15.98% lower.
  • Industry including construction sector employment rose 4.58% y/y to 347,300. In 12mo through Q3 2013, employment in the sector was up 0.59% compared to 12 months average through Q3 2012. Relative to pre-crisis average for 2008, employment in sector stood massive 34.15% lower in Q3 2013.
  • Meanwhile, services employment rose 1.30% y/y in Q3 2013 to1,439,200. In 12mo through Q3 2013 employment averaged 1,423,050 which is 0.7% higher than for the same period in 2012. Compared to 2008 average levels, Q3 2013 employment in Services stood at -2.64%.




So on the net - some good aggregate numbers. Rates of increases, especially averaging-out over 12 months (4 quarters) period are still not exactly spectacular, but we do have overall growth in employment and this growth is also present in the higher value-added sectors. 

Here is the summary of changes for the period since the current Government took office:


Monday, May 7, 2012

7/5/2012: Analysis of April Irish PMIs (4): Profitability

This is the last post on April 2012 PMIs. In the first and the second posts, I covered headline index readings forManufacturing PMI and Services PMI for April 2012. In the third post, I looked at the Employment sub-indices for both sectors. This post will focus on profitability conditions, an index I derived from the PMI data.


April 2012 saw profit margins conditions deterioration slowing down in Services from -15.06 in march to -11.96 in April. 12mo MA is now at -15.9, shallower than the average deterioration in profit margins during the pre-crisis period (-17.8), but deeper than -14.7 average reading for the period since January 2008. Overall, -11.96 April 2012 reading is the slowest pace of profit margins deterioration recored since October 2010. 3mo MA is now at -13.8 and this marks a significant improvement on -19.8 deterioration for 3mo MA a year ago.




Manufacturing profitability index has moved from -24.84 in March 2012 to -22.86 in April 2012, marking the second sharpest decline since March 2011. 12mo MA is now at -17.1, while 3mo MA is at -23.3. This compares against pre-crisis average reading of -11.6 and January 2008-present average of -14.55.



So on the net, profitability conditions continue to deteriorate, but deterioration in Services is less pronounced and de-accelerating continuously compared to historic trends. Deterioration in Manufacturing profit margins continues unabated and is running well beyond historical averages.


The above suggests that while some positive momentum is possible for employment in Services sector, it is unlikely that profits conditions will support much of an employment uptick in Manufacturing.

7/5/2012: Analysis of April Irish PMIs (3): Employment

In the last two posts I covered headline index readings for Manufacturing PMI and Services PMI for April 2012. In this post, I am looking at the Employment sub-indices for both sectors.

Employment index rose to 52.9 in Manufacturing from 51.2 in March. The move is against 49.5 12mo MA and 50.0 average for Q1 2012, suggesting some expansion in Manufacturing employment. The change comes coincident with a decline in the rate of growth in overall sector PMI to 50.1 from 51.5 in March.

In Services, employment index declined to 50 from 51.9 in March 2012. The index 12mo MA is at 47.9 and Q1 average was 48.1. In contrast to Manufacturing, decline in Employment growth rate came against an improvement in PMI from 52.1 in March to 52.2 in April.



Short-term changes in the series, however, are pretty volatile. Chart below shows the counter-moves in the two sectors:


and the chart below plots relationship between Employment and Exports:


The good news is, March and April 2012 mark two consecutive months when exports expansions in both sectors led to above 50 readings in employment as well. Last time that happened on a monthly basis was in April 2011 and last time it happened in two consecutive months was in October 2007.

If sustained over the next 2-3 months, the trend might shift firmly to the upside.

7/5/2012: Analysis of April Irish PMIs (2): Core Services


Previous post dealt with the high level trends in Manufacturing PMI for Ireland. In this post we look at the core data for Services PMI.

Back in March, markit - the agency releasing Irish PMI data for NCB - headlined the changes in the Services index with a rather bombastic "Growth of Activity Sustained in March, and Optimism Hits a 22-month High". Of course, such was the booming time in Irish economy a month ago.

Fast forward one month to April and the headline remains bombastic: "Activity Growth Maintained in April as New Business Rises for Third Month Running"... Ok... so...

Headline PMI in Services (Business Activity index) improved from 52.1 in March to 52.2 in April, which is good news nominally, but statistically still indistinguishable from 50. Good thing is, the moving averages are a bit stronger along the just-above-50 trendline. 3mo MA is at 52.5, 12mo MA at 51.3, and 3mo MAs for 2011 and 2010 are all below the current running at 52.1 and 49.8 respectively. So business activity is indeed somewhat on the rise, albeit a very shallow rise.


Overall, headline Services Activity has been running on average above 50 since June 2009. Anyone noticed the boom, yet?

New Business Activity firmed up to 52.7 in April, from 52.1 in March, marking the third consecutive month of above 50 readings. 12mo MA is at 50.0 and 3mo MA is at 52.8, ahead of same period 3mo average in 2010 and 2011 (49.1 and 51.9, respectively). All, however, remain statistically indistinguishable from 50.


Again, trend pattern in New Business sub-index is identical to the pattern in overall Business Activity index - flat just above 50 since, roughly Q2 2011. The snapshot of more recent data illustrates, next.


Input-output prices are both moderating in trend, but input prices continue to expand, while output prices continue to post significant deflation. Profit margins, therefore, are shrinking more and more - the pattern that is running solidly since August 2009. More on this in future posts, however.


On core components of PMI: New Export Business growth moderated, but remained above waterline at 54.3 in April, down from 55.5 in March 2012. Both monthly readings were statistically significantly above 50, the same as in February. 12mo MA is now at 52.7 - barely statistically significantly above 50, while 3mo MA is at 55.0 - strong reading, ahead of 54.6 in 3mo through April 2011 and 52.8 reading for the same period of 2010.

As mentioned earlier, Profitability remained in the contraction territory, posting a reading of 47.5 in April, worse than 47.9 in March. Last time Profitability sub-index posted a reading above 50 was in December 2007.

Employment sub-index declined to 50.0 in April 2012, down from 51.9 in March 2012. 12mo MA is at 47.9 and 3mo average through April 2012 is at 49.9. This is virtually identical to 3mo MA through April 2011 which came in at 49.8 and is better than a rapid contraction-signaling 43.7 for the sub-index 3mo MA through April 2010.


Confidence slipped to 64.1in April 2012  from 70.4 in March. The series reading is now at 3mo low, but ahead of 12mo MA of 62.5. 3mo MA through April is very strong 67.1, while 3mo average through April 2011 was 66.5 and for 2010 period it was at 64.2. Overall, business confidence is relatively inflated indicator, as shown in the chart below. The indicator has relatively strong coincidental connection - in historical data - to the same period Business Activity index.


Overall, Services PMIs are showing stronger performance in the sector than in Manufacturing, but the numbers are more volatile and trending along the flatline. Business expectations continue to out-perform actual activity and exports orders, although this is hardly a new trend. With profitability severely constrained and actually deteriorating, I wonder if the 50+ readings in the last two months in Employment sub-index are credible.

Tuesday, July 5, 2011

05/07/2011: Employment in Services and Manufacturing - June 2011

As promised earlier, analysis of employment data from Manufacturing and Services PMIs for June 2011.
  • Headline on Services PMIs: After posting only marginal growth in the previous month at 50.5, Irish services activity rose at a faster pace in June to 52.4. However, overall Q2 2011 average at 51.0 signals lower rate of expansion than Q1 2011 at 53.4. Current index is above it's 12mo MA of 51.6.
  • Headline on Manufacturing PMIs: June activity signals a slowdown at 49.8, down from expansionary May reading of 51.8. Q1 2011 expansion of 56.1 average has moderated through Q2 2011 to 52.5. 12mo MA is at 52.6.
  • Employment sub-index in Manufacturing showed further acceleration in the rate of decline from 49.9 in May to 48.3 in June. The sub-index now stands below 12mo MA of 50.2. Q1 2011 average was expansionary 53.2 and despite two consecutive months of contractions, Q2 sub-index still reads 50.7. This compares favorably relative to Q3 2010 reading of 46.8 and Q4 2010 reading of 49.9. Employment in Manufacturing has now fallen for two months, breaking expansionary readings trends established over December 2010-April 2011.
  • Employment sub-index in Services remained flat at 48.1, signaling continued contraction in May and marking a second consecutive month of contractions since an outlier expansion in April 2011 to 51.1. 12mo MA is now at 48.7, while Q1 2011 reading was 49.2, accelerating down to 49.1 in Q2 2011. In comparison, Q3 2010 reading was 48.9 and Q4 2010 reading was 47.6, so the rate of jobs attrition in the sector has declined in H1 2011 relative to H2 2010. With April 2011 out-of-line reading of expansion, this index remains in contractionary territory in 39 out of 40 last months

With both Manufacturing and Services signaling contractions in employment, we are now firmly into jobless recovery territory in Services and stepping into the recessionary territory for Manufacturing.

It is worth noting that volatility of employment sub-index has risen since the beginning of the crisis in Manufacturing, but declined in Services, most likely due to the persistent trends in domestic services. The same pattern is true for core PMIs.