45126-Invest. Qual-No111

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45126-Invest. Qual-No111

Ireland’s Long Run Economic Development and Vulnerability(QNHS) showed that employment for the third quarter of 2002 hadincreased by just 0.5 per cent compared to the same period for 2001.There was a substantial decline in the industrial sector with anannual fall in employment of close to 17,000 or 5 per cent.Employment in agriculture, forestry and fishing fell by 3.6 per cent.There was a modest increase in employment in private services,with an increase of 5,700 or 0.7 per cent. Employment growth inconstruction continued to be robust up to the third quarter, with anannual increase of 3,600 or close to 2 per cent. The strongestemployment growth was in the public service with an annualincrease of over 20,000 or over 6 per cent. However, even hereemployment growth is now slowing and there was a fall of 3,500between the second and third quarters.The slowdown in employment growth has led to an increase inunemployment from 3.7 per cent in the first quarter of 2001 to 4.6per cent in the third quarter of 2002. The rise in unemployment isless than might have been expected given the slowdown ineconomic growth. Factors that have moderated the rise inunemployment have been the increase in public service employmentand a decline in labour force participation among youngerpeople (15 to 34). It is also suggested by the Central Bank in itsQuarterly Bulletin of Winter 2002 that some firms are holding ontoworkers in the expectation that conditions would improve in thenear future. This interpretation is supported by the fact that hoursworked have fallen.Looking at 2003, all forecasters are expecting that unemploymentwill continue to increase. Forecasters are projecting averageunemployment for 2003 to be in the region of 5 to 6 per cent. Therise in unemployment is a matter of concern for the Council.Increase in InflationAfter several years of low inflation, inflation has re-emerged as aconcern in recent years. There was a particularly large increase inthe Consumer Price Index (CPI) in the year 2000, with an increaseof 5.6 per cent. The rate of increase moderated somewhat in 2001when inflation increased by a still substantial 4.9 per cent. The rate23

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