Session 1 : Ireland’s Society in Economic Downturn

Kieran WalshCentral Statistics Office

Outline of series of talks

Overview of range of information available from CSO

Insight into impact of economic downturn

Stiglitz Report

Session 1: Effect on people

Session 2: Effect on business

Session 3: Overall effect on economy

Session 4: Alternative view of effect on economy

Session 5: Accessing CSO data

International context

Housing bubble in US in 2005/2006 (peak mid 2006)

Adjustable rate subprime mortgage defaults during 2007

Securities based on subprime mortgages crash

March 2008 emergency sale of Bear Stearns (sale value of $2 per share v $75 a week earlier)

Irish stock market lost €3.5bn value in one day

15th September ‘08 Lehman Bros declare bankruptcy

September 29th Irish banking guarantee

Irish context – overall economic decline

Irish context – overall economic decline contd.

GDP at constant market prices

2007 – €186.6bn

2008 – €180.0bn

2009 - €166.3bn

2010 – first 3 quarters €124.1bn (€165bn annualised approx)

Fall approx. 13% ‘07 to ‘10 (approx. +1% EU-27)

Approx. 21% drop on GNP

Reductions mainly up to Q3 2009

Session 1: Ireland’s society in economic downturn

Range of information available indicating impact on Ireland society

Employment and unemployment (QNHS)

Live Register

Income/Earnings (SILC/EHECS)

Prices

Other social indicators

Look at where we started and where we’ve moved to

Silver lining???????

Ireland – 2003 to 2007

2003 to 2007 contd.

Up to 2007 continuous labour market and population growth driven by inward migration

Natural growth would only have provided 20-25k per annum while employment growth was up to 90k per annum at points

Peak employment level – Q307 at 2.15m – employment growth 4% to 5% per annum from 2004 to 2007

Construction effectively peaked in Q3 2006 but didn’t substantially fall until q4 2007

In years up to 2007 construction had regularly accounted for 20-25% of employment growth and up to half of male employment growth.

Unemployment rate below 5% since 1999

2003 to 2007 contd. – International Comparison

2004 2005 2006 2007

Employment Rates

EU-27 62.8 63.5 64.5 65.4

Germany 65.0 66.0 67.5 69.4

France 63.8 63.7 63.7 64.3

UK 71.7 71.7 71.6 71.5

Ireland 66.3 67.6 68.7 69.2

US 71.2 71.5 72.0 71.8

Unemployment Rates

EU-27 9.1 8.9 8.2 7.2

Germany 9.8 10.7 9.8 8.4

France 9.3 9.3 9.3 9.2

UK 4.7 4.8 5.4 5.3

Ireland 4.5 4.4 4.5 4.6

US 5.5 5.1 4.6 4.6

While employment rates grew over the period – less than Germany and in line with EU average

Unemployment rates flat while EU average fell

2003 to 2007 contd. – International Comparison

2004 2005 2006 2007

Population (15-64) % annual growth

EU-27 0.3 0.7 0.5 0.4

Germany -0.4 0.5 -0.4 -0.6

France 0.7 0.9 1.0 0.8

UK 0.7 0.8 0.7 0.6

Ireland 1.8 2.5 3.1 2.7

US 1.1 1.7 1.8 1.1

Employment (15-64) % annual growth

EU-27 0.9 1.6 1.9 1.8

Germany -1.4 3.2 1.9 2.1

France 1.0 0.9 0.8 0.6

UK 0.4 0.7 0.7 1.6

Ireland 3.1 4.6 4.7 3.4

US 1.2 1.2 1.1 1.0

Ireland had far higher population growth over the period than other countriesEmployment growth among persons aged 15-64 more than twice the EU average over the period and significantly higher than all other countries

2003 to 2007 contd. – nature of employment growth

By genderMale employment grew by 159,400 (+15%)

Female employment grew by 153,400 (+20%)

By ageOf 313,000 total growth 121,000 (+24%) were 25-34 year olds with a further 120k aged 35-54 years old (+15%).

No growth for 15-19 year olds and 22,000 for 20-24 year olds (+10%)

Sectoral employment growth, 2004 to 2007

By sectorBy sector contd

Largest increase in construction (+64,000 or +32%) – mainly male

Next largest wholesale and retail (+39,000 or +15%) and health (+36,400, +20%) – mainly female

Increase greater than 10% for 10 of the 13 published sectors and overall increase of 13.5% (+252,000)

2000 to 2007 - Construction employment

2000 2004 2005 2006 2007

Construction as a % of total employment

EU-27 N/A 8 8 8 8Germany 9 7 7 7 7France 7 8 8 8 8UK 6 7 7 7 7Ireland 10 11 13 13 13US 5 5 5 6 6Construction as a % of male employment

EU-27 N/A 13 13 13 14Germany 13 11 10 11 11France 12 13 13 13 14UK 11 11 11 12 12Ireland 16 19 21 22 22

Unemployment, 2007

Unemployment rate approx. 4.5% (close to 5% for males and 4% for females) – relatively stable

Just over 100k unemployed for which approx. one quarter long term (one year or more)

Long term-unemployment higher among males than females – 30% v 20%

Over long-term unemployment rate 1.3%

Ireland - up to 2010

Ireland – 2006 to 2010

2007 to end 2008 - Employment

Annual labour market growth slowed from 4% in Q3 2007 to 0.6% in Q3 2008 at which point the labour market peaked at 2.27m (now 2.15m)Initially numbers employed fell relatively slowly with 2% drop (-43k) in year to Q3 2008.

All of decrease maleAll reduction in full-time employment with slight increase in part-time

Part time increasing in sectors where full time decreasingOver 80% or reduction accounted for by males in constructionMale employment in industry falling alsoWholesale and retail had initially grown up to Q1 2008 before falling at a slow rateWithin construction reduction was in employees attached to housing (-27%) with non-housing construction still increasing (+10% approx) and self employed increasing marginally

End 2008 to date

Employment fell by 140,000 or 6.7% between Q3 2008 and Q1 2009 combined (-5.3% when seasonal factors accounted for)Since Q1 2009 (up to Q3 2010) fall in employment has been 114,000 or 5.8%Over 2 years to Q3 2010 total drop 255,600 (-12.1%), approx. 75% male.Part time employment has increased over the period although flat since Q3 2009Employment back at Q1 2004 levels – males back at Q1 2000 levels – females Q1 2006

Employment and unemployment contd.

Earliest sign of change

Q3 2006 – Construction employment peaked

While not falling until Q4 2007 within Construction employment shifted to more self employed and away from housing from Q3 2006 onwards

Housing accounted for close to 70% of Construction employment at peak and large majority were employees – less than 50% now

Sectoral employment 2008 to 2010

Q3 2008 to Q3 2009 – Decrease of 184,700

Q3 2009 to Q3 2010 – Decrease of 70,900

Sectoral employment contd.

Sectoral Employment 2010

Construction now at 6% (was 13%) – more than 50% of fall since Q307

Germany, UK, US all in 5 to 8% range (and generally at that level over longer term)

Now 11% of male employment (13% EU average)

Wholesale and retail and industry remain largest sectors

Reductions in employment in 10 of the 13 sectors since 2007

Unemployment, 2007 and 2010

Unemployment, 2010

More than half unemployed males now long term unemployed

Long-term unemployment rate 6.5% (late 1990’s levels)

Long term-unemployment rising in particular from early 2009 with short-term falling since Q3 2009 (offset)

Profile of people unemployed in Q3 2010

By gender and duration

Long term male unemployed now the largest group

Female short-term a growing proportion

Employment and unemployment – focus on age

Employment and unemployment – focus on age

Employment and unemployment – focus on age

Greatest change among 15-24 year olds

Were 16% of working people in 2007

Now 9%

Narrowing of age range – now 76% of workers aged 25-54 (71% in 2007)

Employment and unemployment – focus on age – 15-24 year olds

Population has fallen (-14%, -90,000) – migration– most evident for 20-24 year olds

Marginal increase in number of students despite population drop (now 60% of total was under 50%)

Halving of numbers in employment and doubling of unemployed

Live Register

Not the same as unemployment but more up to date – similar trend

Live Register

Most recent live register information shows live register has been falling on a seasonally adjusted basis since July

January 2011 - 443,000 people signing on (467,000 peak in July/August 2010)

Standardised unemployment rate falling slowly (now 13.4%)

As with unemployment number signing on less than one year falling while long-term increasing

Income and prices

Income – SILC 2003 to 2009

Income – SILC 2003 to 2009

In 2003 under €700 per week (€35,800 per annum)

Rose by an average of 7.5% per year to 2007 (€48,000 per annum)

In 2007 increase of 10% due to SSIA’s

Increased by just 2% in 2008

Fell by 6% in 2009

Decrease due to lower employment and less direct income

Social transfers still increasing (€287 per week in 2009 on average compared with €150 per week in 2003 – more recipients)

Lower disposable incomes and increased burden on the state

Employment and earnings of employees fell from 2009 to 2010

Prices – consumer price index

Prices - contd

Overall prices fell by 8.4% on average from September 2008 (peak) to January 2010

Wide range of price decreases including food, mortgage interest (interest rates), rents, electricity etc.

Annual inflation returned in August 2010 and running at 1.7% as of January 2011

Increases in mortgage interest and petrol prices

Income and prices contd.

As prices increase and income decreases deprivation increases

In 2009 5% of households in mortgage arrears

10% in arrears on utility bills

17% of households experienced 2 or more of a list of 11 types of deprivation, up from 12% in 2007

At end of September 2010 Central Bank estimates show 40,000 mortgages in arrears more than 90 days (€7.8bn in value – increased by 11.1% in 3 months)

Silver lining?????

Loss in employment stabilising (still falling but at slower rate and limited to certain sectors)

Live register has been falling over last 6 months at a slow rate

Vacancies higher in 2010 than in 2009

Exports performing well

Unemployment rate for people with third level honours degree approx. 7% (employment rate 82%)

Less than 6% of people with a third level education had suffered 2 or more forms of deprivation in 2009 (less than 1% in consistent poverty – state average 5.5%)

Nearly all available on www.cso.ie (along with much more)

Possible to access microdata for research purposes

THANK YOU