Despite a 'dynamic' market, consumer confidence is down and firms are concerned about finding suitable candidates, writes Laura Slattery

Redundancies are running at around 500 jobs a week but new jobs have been created at a rate of around 1,800 a week over the past year, the latest Quarterly National Household Survey (QNHS) shows.

The Central Statistics Offices (CSO) figures suggest the labour market is now "exceptionally dynamic", according to IIB Bank chief economist, Austin Hughes.

The relatively high rates of job losses and job creation explain why consumer confidence has dropped at the same time that one in 10 firms told an IIB survey their main concern is the availability of suitable employees, Mr Hughes said yesterday.

As expected, immigration continued to drive a substantial proportion of the 68,000 increase in the number of people employed in the June-August period, compared with the same quarter in 2006. But a new trend is emerging: for the second quarter in a row, part-time jobs represented a substantial chunk of the new jobs created.

In the CSO's December-February quarter, part-time employment rose by an annual rate of 3.8 per cent and accounted for 17 per cent of employment growth. By March-May, that rate rose to 7.8 per cent and accounted for 35 per cent of employment growth.

The most recent survey shows "a rare event", according to Ulster Bank economist Pat McArdle. The 36,800 new part-time jobs - an annual increase of 10.6 per cent - accounts for more than half of the new jobs created.

The only time this has happened in the last decade was in the third quarter of 2003, a time which was marked by a slowdown in employment growth and an increase in the unemployment rate. The latter, as measured by the QNHS, has yet to materialise, but the Government forecasts that the rate of unemployment will reach 5.5 per cent in 2008.

The high proportion of part-time jobs suggests that the quality of the jobs on offer has deteriorated, while employers look for a halfway house between committing to a full-time position and doing without an extra person, Mr McArdle says.

But only a small fraction of the part-time workers indicated they were looking for full-time employment, Mr Hughes notes, suggesting that some sectors may actually be facing constraints on the supply of new workers.

Employment in the construction sector is still growing annually, albeit by just 1.7 per cent compared to the previous quarter's 6.7 per cent growth rate. But the increase is down to a a 5,700 rise in the number of self-employed workers in the sector as builders who were laid off from sites entered the still booming home improvement trade.