Employment has picked up strongly, giving one of the clearest indications yet that economic growth is accelerating. Cliff Taylor, Economics Editor reports

Employment has picked up strongly, giving one of the clearest indications yet that economic growth is accelerating. The total numbers at work rose by almost 45,000 in the year to last October, with a clear acceleration in jobs growth in the second half of the year.

The figures, published as part of the Quarterly National Household Survey from the Central Statistics Office (CSO), show that the unemployment rate fell to 4.6 per cent in the fourth quarter, from 4.9 per cent in the previous three-month period.

The figures show that the public sector continues to contribute significantly to jobs growth, with the numbers employed in public administration, health and education rising by almost 20,000 to 380,100.

There was a 12,100 rise in the health sector. While this is not an exact measure of public sector employment, it suggests the target set by the Minister for Finance, Mr McCreevy, in the 2003 budget to stabilise public sector employment last year, was not met.

However, other sectors also contributed. The boom in house-building was reflected in a 9,300 rise in construction employment. In the "other services" sector - which includes many services outside the financial sector - employment rose by 7,500, while the financial and other business services sector increased by 6,400.

A 7,600 decline in production industries was the most notable decline, showing the intense pressure on the manufacturing sector from slow global growth and a rising euro. However, the rest of the economy fared better despite this difficult backdrop, showing the resilience of the jobs market.

The figures show that 1.815 million people were employed when the survey was taken in September-November last year, a 44,600 rise on the same period in 2002. This 2.5 per cent annual rate of increase is a significant acceleration from earlier quarters.

Further evidence of the strengthening jobs market is provided by the breakdown which shows that three-quarters of the jobs growth in the year was in full-time employment. This was the opposite to earlier quarters, where part-time employment accounted for most of the growth. Over half of the annual employment growth was attributable to 25 to 34-year-olds.

The uplift also encouraged more people to enter the jobs market. This pushed the number of people in the labour force - both employed and unemployed - to 1.901 million, accounting for 60.2 per cent of the population aged over 15. The survey, which is not comparable with the monthly live register, measures unemployment at 86,500, up 2,400 on the year but down 12,400 from the previous quarter.

Davy Stockbrokers estimates that seasonally adjusted jobs growth in September-November last year was 1.5 per cent up on the previous quarter, the strongest growth in four years.