Irish economy still has a long way to go in recovering from Covid-19

Labour force figures from the Central Statistics Office (CSO) for the second quarter of this year highlight the improvements in both employment and unemployment data as much of the Irish economy opened up over the summer months.

In terms of the Covid-adjusted employment data, there were 2.12 million people between the ages of 15 and 89 in a job at the end of June – with a Covid-adjusted employment rate of 61.7 per cent for those aged 15-64. By the end of July, the number had risen to 2.18 million at work, for a rate of 63.7 per cent, and by the end of August, the number had risen again to 2.2 million for a rate of 64.3 per cent.

This coincided with the reopening of the hospitality industry and a resumption of non-essential air travel.

In terms of the Covid-adjusted unemployment rate, the estimate is that 413,687 people between the ages of 15 and 74 were jobless at the end of June, giving a Covid-adjusted unemployment rate of 16.2 per cent for this age bracket. Move on a month and the number had declined to 356,648 unemployed for a rate of 13.5 per cent. By the end of August, the number had fallen again to 335,178 to give a rate of 12.4 per cent.

The impact of the pandemic on the economy – with people laid off during lockdowns and rehired as the rules changed – has required the CSO to adjust the usual definitions and methodology that it uses for calculating the labour force and the number of people in and out of work.

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To try and capture the impact of Covid-19, the CSO has published the separate Covid-adjusted estimates to provide “transparency” in relation to the impact of the pandemic on the economy.

The number in employment should improve further as the year progresses and restrictions on the events sector and various indoor activities unwind. Nonetheless, the second-quarter figures highlight the long road that still remains to be travelled before the economy returns to its pre-pandemic level.

Air travel still remains well off its peak, as evidenced by the standoff between Aer Lingus and its unions, and the hospitality sector faces a difficult winter, having had its prime summer season curtailed due to pandemic restrictions.

Sadly, the punishing impact of the pandemic on the livelihoods of tens of thousands of workers here will continue to play out for a long time to come.

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