The rate of unemployment fell in the first quarter of 2011, declining to 14 per cent from 14.8 per cent three months earlier.

The fall in the unemployment rate in the quarter to March came despite a decline in the number of people at work.

The seasonally adjusted figures showed the number of people unemployed fell by 21,900 to 296,000, a 6.9 per cent fall, while the number at work was down by 9,300, or 0.5 per cent, compared to the previous three month period.

A total of 1,804,200 people were employed in the first quarter of the year. This is a fall of 12,600 people, or 0.7 per cent, in the number of people at work in the previous quarter

"These movements in the seasonally adjusted series are occurring despite relatively little change in recent quarters in the unadjusted number of persons unemployed which has fluctuated between 293,600 and 299,000 for the last four quarters," the Central Statistics Office said.

The labour force also shrank in the quarter, falling by 1.5 per cent or 32,800 over the year to just under 2.1 million. More than 1.4 million people are now classed as not part of the labour force.

The data also showed that in May, the unemployment rate edged slightly higher to 14.1 per cent.

The number of women unemployed rose by 13,600, or 17 per cent, to 93,800. Male unemployment was 3.5 per cent higher, adding 6,900 to the jobless total, but the overall figure remained higher at 201,800.

The construction sector continued to be among the worst hit, with a decline of 16.8 per cent in employment over the year.

Full-time employment fell by 4.6 per cent over the 12-month period, but this was partly offset by a rise in the number of part-time workers. Long-term unemployment was higher in the year, rising to 7.8 per cent.

Minister for Jobs Richard Bruton said the figures were a reminder of the scale of the unemployment challenge facing the Government.

"Emigration is now draining our country and our economy of some of our best and brightest people and we must do everything we can to create opportunities for them to stay here and contribute to our recovery," he said.

"I am determined to urgently implement a series of reforms to reduce business costs, increase access to finance and to encourage and support innovation in every way possible," said Mr Bruton.

"It took many years of misguided policies to get our country into the jobs crisis we face now and it will take a number of years of the right policies to get us out of it. That is why there isn't a moment to lose in driving on with the reforms and policy changes needed to help turn our shared fortunes around."

"This does not indicate that unemployment is on a downward path, and only reverses the surprise rise in the fourth quarter," said National Irish Bank's chief economist Dr Ronnie O'Toole.

"However, it does indicate that the labour market is very close to stabilising, with half of all industry categories showing year-on-year increases in employment. These increases, however, were not large enough to offset the continued loss of jobs in hospitality and construction."

The Irish Small & Medium Enterprises Association  said the unemployment situation was "horrendous".