Session 1 : Ireland’s Society in Economic Downturn

1. Session 1 : Ireland’s Society in Economic Downturn Kieran Walsh Central Statistics Office

2. 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

3. 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

4. Irish context – overall economic decline

5. 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

6. 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???????

7. Ireland – 2003 to 2007

8. 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

9. 2003 to 2007 contd. – International Comparison • While employment rates grew over the period – less than Germany and in line with EU average • Unemployment rates flat while EU average fell

10. 2003 to 2007 contd. – International Comparison • Ireland had far higher population growth over the period than other countries • Employment growth among persons aged 15-64 more than twice the EU average over the period and significantly higher than all other countries

11. 2003 to 2007 contd. – nature of employment growth By gender By age Of 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%) • Male employment grew by 159,400 (+15%) • Female employment grew by 153,400 (+20%)

12. Sectoral employment growth, 2004 to 2007 By sector By 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)

13. 2000 to 2007 - Construction employment

14. 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%

15. Ireland - up to 2010

16. Ireland – 2006 to 2010

17. 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 male • All reduction in full-time employment with slight increase in part-time • Part time increasing in sectors where full time decreasing • Over 80% or reduction accounted for by males in construction • Male employment in industry falling also • Wholesale and retail had initially grown up to Q1 2008 before falling at a slow rate • Within construction reduction was in employees attached to housing (-27%) with non-housing construction still increasing (+10% approx) and self employed increasing marginally

18. 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 2009 • Employment back at Q1 2004 levels – males back at Q1 2000 levels – females Q1 2006

19. 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

20. Sectoral employment 2008 to 2010 Q3 2008 to Q3 2009 – Decrease of 184,700 Q3 2009 to Q3 2010 – Decrease of 70,900

21. Sectoral employment contd.

22. 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

23. Unemployment, 2007 and 2010

24. 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)

25. 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

26. Employment and unemployment – focus on age

27. Employment and unemployment – focus on age

28. 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)

29. 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

30. Live Register • Not the same as unemployment but more up to date – similar trend

31. 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

32. Income and prices

33. Income – SILC 2003 to 2009

34. 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

35. Prices – consumer price index

36. 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

37. 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)

38. 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%)

39. Nearly all available on www.cso.ie (along with much more) • Possible to access microdata for research purposes THANK YOU