Ireland’s unemployment rate falls to 12.5%
For the first time in two years, Ireland’s unemployment rate fell in October to 12.5%, down from 12.6% the previous month.
The fall in the rate came as a surprise to many analysts as the economy has been hit by a severe slump within the construction industry, which has led to a significant amount of job losses.
The last time the unemployment rate fell was in December 2007, when just 4.7% of the workforce was unemployed.
Meanwhile, the Central Statistics Office said the number of people claiming unemployment benefits fell in October by more than 7,400 to 412,407.
Yesterday, official figures revealed that Spain’s unemployment rate reached 19.3% (one of the highest of any European region) as the economy, like Ireland, has been hit by a slump within the construction industry.
Spain’s jobless rate is more than double the 9.2% rate for the EU as a whole. However, Spain’s unemployment rate is slightly below the 19.7% rate recorded for Latvia.
Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin, described Ireland’s jobless figures as “encouraging” and “suggest that the jobless rate has peaked“.
However, economists cautioned that Ireland’s unemployment rate could still reach 15% next year.
Ireland has experienced a property boom since the late 1990s, with multinationals arriving to take advantage of one of the lowest corporate tax rates in the euro zone.
However, the ailing housing market has had a major impact on the former “Celtic Tiger” economy and property prices have plummeted since their high in 2006.
In April, the country’s Government unveiled an emergency budget after admitting that the country’s budget deficit was spiralling out of control.
The country’s woes have led Nobel Prize-winning economist Paul Krugman, to say that the Irish economy will take almost five years to recover.