For the first time since 2009, more people are coming into Ireland than leaving.
The change from net outward migration to net inward migration, detailed in the latest population and migration estimates from the Central Statistics Office (CSO), marks a watershed in Ireland's hard-won economic recovery.
Emigration has been a defining feature of Ireland’s boom-and-bust economy and when you focus just on Irish nationals, there are still more leaving than returning.
The overall post-2008 exodus, however, appears to have subsided thanks to a robust recovery in the labour market, which has been more rapid than anyone expected.
The CSO’s latest Quarterly National Household Survey, released alongside the migration numbers, show the labour market has expanded for 15 successive quarters since 2012. This has encouraged emigrants to return home and many others already here to re-join the labour market.
The figures show the size of the labour force rose to 2.2 million in the second quarter of 2016, representing an annual increase of 32,800, while the participation rate has risen to 60.6 per cent from 60.2 per cent a year ago.
These changes prompted an upward revision in the State’s headline rate of unemployment, with the July figure now at 8.3 per cent as opposed to the previous 7.8 per cent.
It would be wrong to view this as a negative, however, because the rate of job creation has actually accelerated.
Even with the pre-Brexit headwinds, employment growth on a quarterly basis rose from 0.8 per cent in the first quarter of 2016 to 1 per cent in the second, equating to about 20,000 jobs, with the lion’s share of these in full-time employment.
Good measure
Job creation has always been considered a more reliable measure of economic activity, and this is doubly true of Ireland where the large multinational sector skews traditional measures such as gross domestic product (GDP). Recent revisions to GDP, which put last year’s growth at a colossal 26 per cent, amply makes the point.
The latest numbers put the rate of recovery in the labour market at about 3 per cent a year, which probably chimes better with most people’s sense of it.
The increase in employment last year was roughly about 50,000, up on 32,800 in 2014. The evidence so far this year points to another net rise of around 48,000.
Of course, the next six months will take place against the likely fallout from Brexit and the associated weakness in sterling – a dynamic that nobody seems to have a handle on.
The other big takeaway from Tuesday’s figures is a recovery in construction, which may yet have a bearing on the State’s chronic housing supply issues.
Employment rose in 12 of the 14 economic sectors on an annual basis but fell in two. The greatest rates of increase were posted in the administrative and support services, including services to building, which rose 9.9 per cent, or by 6,300.
Employment in construction, which suffered the most in the downturn, rose by 8.7 per cent, or 10,900.
