Some very scary figures for the Irish labour market

While not entirely unexpected, the Spring outlook from the Economic and Social Research Institute (ERSI) presents some very disconcerting figures about the Irish labour market as well as pay rise prospects for the financial sector.

The headline statement is that the Irish economy is to shrink by 9.2% in 2009 - the sharpest fall by any industrialised nation since the Great Depression.

The employment market is therefore predictably bleak. Unemployment is tipped to rise to 13.2% of the labour force in 2009, and increase again in 2010 to 16.8%. This is from 6.1% last year and 4.5% in 2007.

But this paragraph makes for particularly uncomfortable reading:

We expect to see the number unemployed averaging 292,200 in 2009, an increase of 155,500 on the 2008 figure (or 114%).This implies that the unemployment rate would average 13.2%.

And:

For 2010, we expect further employment falls, amounting to 102,800.

Separately, figures from Ireland's Live Register peg unemployment at 11.4%.

The ERSI doesn't break unemployment figures out by industry, so we can't tell you how many of these will hit the financial sector.

However, the annual employment survey for the 2009 Finance Dublin Yearbook says that the majority of firms had kept headcount broadly in line with 2007 levels at the end of last year. It was, however, anticipating cuts in key areas, such as the funds industry in the next few months.

The ERSI report also highlights how wage increases have largely halted:

More to come? Of course - the ERSI is forecasting wages to fall by 3% this year and another 1.6% in 2010.