Measures of economic activity, such as real GDP and manufacturing production, remained resilient over the course of 2020 due to the outsized impact of the multinational sector.
A recently published Economic Letter from the Central Bank of Ireland found that government supports introduced in response to the pandemic have “significantly mitigated the impact of Covid-19 on household incomes”.
There was a marginal quarterly increase of 4,900 more jobs in the final quarter of 2020, which still translates to a drop of 55,000 in the numbers at work compared to a year ago. These employment numbers are based on the internationally agreed definition which includes those “temporarily away from work” as employed, and they include those not working but claiming the Pandemic Unemployment Payment as a result.
The CSO also provide a Covid-adjusted measure, which showed numbers at work as of December 2020 at 1.97mn, which is down by about 16.5% from Q4 2019.
Based on this adjustment, the Irish economy was estimated to have lost somewhere between 55k to 391k jobs during the year. This wide range highlights the uncertainty surrounding measuring employment.
The standardised monthly unemployment rate edged down from its summer peak and now sits at 5.8% in January, despite lockdown measures being reintroduced intermittently throughout Q4.
The Covid-19 adjusted unemployment rate increased in the final quarter of 2020 and jumped in January to 25%. While this measure currently reflects temporary layoffs rather than permanent job losses, there is still a risk that unemployment remains persistent over 2021 even after the economy re-opens.
Covid-19 has had an 'uneven impact' on Irish jobs, according to KBC. The most obvious example of this is the sectoral divide: areas such as accommodation, food service, and construction remain severely impacted, while some sectors, such as information and communication and industry, have seen job increases. There are also notable differences in jobs lost (or gained) depending on age, region, and education level.
As the Irish economy normalises on the back of the easing of lockdown restrictions and the vaccine roll-out, it will be key to monitor the above trends to assess the job market recovery.
© 2021 Checkout – your source for the latest Irish retail news. Article by Conor Farrelly. Click sign up to subscribe to Checkout.