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Irish employment growth slows to a six-year low

New figures from the Central Statistics Office show the numbers employed in the economy falling from March to June of this year.

The CSO's latest Labour Force Survey has led to an upward revision in the unemployment rate for July from 4.6% to 5.3%. 

The number of people at work is a key measurement of how our economy is doing. 

The good news is there were 45,000 more people in employment here at the end of June compared to a year ago. 

However, there was a reduction in the numbers employed in the months from March to June. Add in some statistical adjustments and it has led the CSO to revise upwards its latest unemployment rate for July from 4.6% to 5.3%. 

Minister for Finance, Paschal Donohoe said he is encouraged by these figures which demonstrate the continued strength of the economy with employment growth spread relatively broadly across the regions and sectors.

"However, we did see a softening in the level of employment in the second quarter which was down from the record level set during the exceptionally strong first quarter, with a slight uptick in unemployment as well," Minister Donohoe said. "This is not surprising given the strength of the first quarter numbers, and is in keeping with my Department's overall outlook for the economy as set out in its Spring Economic Forecasts as published in the Stability Programme Update in April.

"A slight softening in the second quarter is in keeping with some of the high frequency economic data and surveys released during this period, as well as global economic developments."

Dermot O'Leary, chief economist with Goodbody, said, "While one should not get carried away with one quarter, it does suggest that a combination of slower construction growth, Brexit uncertainty and wider global trade concerns is having some impact on the very open Irish economy".

The Minister for Finance said the figures show that more people are working here than ever before, and that represented an important development as the country faces the challenges Brexit may bring.

Paschal Donohoe acknowledged the figures point to a trend of slowing down in the level of employment growth.

But he said the CSO points out that those changes have to be seen in light of the exceptionally strong figures recorded during the first quarter of the year.

He said the economy is performing very well, and the employment forecasts are in line with the forecasts published in the Summer Economic Statement and Stability Programme Update.

He added that he does not think Brexit was a factor in the slowdown in employment growth.

But he said he does acknowledge that there is growing concern from a consumer sentiment and investment point of view regarding the effect Brexit might have on the economy in the future.

"Ireland has an economy that is resilient, diversified, with lower levels of private debt, and national finances that are in a stronger position," he said.

"We are capable of responding to the challenges that Brexit might bring, while acknowledging those challenges from an economic point of view would be significant."

He said it's imperative that those investing in our economy and those employed here are very clear about what the budgetary intentions are for next year. 

"The government will be making a judgement at a point in September regarding what we think is the most likely scenario that we might face later in the year and that in turn will have an effect on policy decisions that I will make on behalf of the government," he said.

He said the cabinet will meet next week and at that point it will discuss where Brexit stands.

The risk of a no-deal Brexit is growing he said and that will have a material effect on budgetary decision he will make, he added.

However, he said he didn't want to prejudge any decision the Government might make on whether it will proceed with a Brexit focused budget.

On Brexit preparations, he said he thinks businesses are taking seriously the advice they are being given.

He said it is imperative for those companies with a large cross border business that they use the coming weeks to get Brexit ready.

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