Written answers

Wednesday, 8 July 2009

Department of Finance

Unemployment Levels

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Question 58: To ask the Minister for Finance his views on the June 2009 live register figures and the latest quarterly national household survey; if he will provide revised estimates in respect of unemployment figures for year end 2009 end 2010; the way these trends and estimates are expected to impact on the general Government balance for both 2009 and 2010; the way these trends and forecasts compare to those provided at the supplementary budget of 7 April 2009; and if he will make a statement on the matter. [27986/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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In June of this year, the seasonally-adjusted number on the Live Register was 413,500 resulting in a standardised unemployment rate of 11.9 per cent. The monthly increase in June was the lowest since September last year. In other words, the rate of labour market deterioration is not as bad as in the first quarter of this year.

The latest quarterly national household survey relates to the first quarter of this year, and shows that total employment fell at an annual rate of 7.5 per cent – the equivalent of 158,500 jobs – in the first quarter. The unemployment rate was 10.2 per cent.

These trends in both the Live Register and the quarterly national household survey are in line with labour market projections made by my Department in the April Supplementary Budget, so that revisions are not necessary. The budgetary arithmetic is based on employment falling by 7.8 per cent on average this year and by 4.6 per cent next year. Unemployment is forecast to average 12.6 per cent this year and 15.5 per cent next year. The number on the Live Register is projected to average 440,000 this year, which unfortunately implies breaching the 500,000 mark by end-year.

Therefore, the trajectory for the public finances – specifically the general government position – over this year and next is unaffected by the publication of labour market data since the Budget was formulated.

Falling employment and rising unemployment is the most worrying aspect of the economic downturn. The Government is working to improve the competitiveness of the economy so that we are in a position to exploit the global recovery when it emerges, thereby providing support to the labour market.

We are also investing in the smart economy, maintaining high levels of capital spending and directing that into labour intensive areas. For example, I announced the establishment of a Stabilisation Fund of €100m over two years to support vulnerable but viable enterprises and an R&D target of 2.5 per cent of GNP by 2013. In addition, I announced in the recent Supplementary Budget a further range of labour market activation initiatives.

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