IBEC said the poor employment performance was attributable to weak trading conditions and a sharp increase in business costs.

Employment grew by 1.4 per cent in 2002 but only because of the rise in the numbers working in the public sector. Figures in the Quarterly National Household Survey show that industrial employment last year fell by 16,000.

The survey, conducted by the Central Statistics Office (CSO) in the fourth quarter of 2002, showed that 1.77 million people were in work, a rise of 17,800 on the same period in 2001, but 24,100 down on the previous quarter.

The annual rate of growth was sharply lower than the 2.9 per cent recorded a year earlier, continuing a downward trend that began in 2000.

Broken down, the figures show that employment in the public sector rose by about 6.7 per cent last year, offsetting a 5 per cent drop in those working in industry.

A total of 84,100 people were out of work in the last three months of 2002, a rise of 11,500 on the same period in 2001 bringing the unemployment rate to 4.5 per cent from 4 per cent a year earlier.

The survey is seen as the most accurate barometer of employment in the economy. It showed that 60 per cent of the rise in the jobless figures was within the 25-44 age group.

Friends First economist Mr Jim Power said public sector employment would not boost figures this year, provided the Government abided by the public service embargo it had announced.

He added that the figures for 2002 belied the stated difficulty in recruiting to the public sector and undermined the rationale for benchmarking awards "that are going to prove such a burden for the private sector of the economy over the coming years".

Economists said unemployment this year could rise to 6 per cent. IIB Bank's Mr Austin Hughes said he expected employment to fall by about 15,000 but acknowledged it was possible the figure could be double that.

Labour Party spokesman on enterprise, trade and employment, Mr Brendan Howlin, said the figures, "bad as they are, do not include many of the high-profile closures announced since Christmas". He said the Government "had nothing to offer the thousands of families who are suffering as a result of job losses".

As employment conditions got tougher, younger people stayed out of the labour force. The survey showed a 8,700 fall in the number of those in the 15-to-34 age group available for work.

Part-time employment grew nearly twice as fast as full-time work, according to the survey, rising by 1.7 per cent compared to 0.9 per cent.

Teleworkers account for barely 1 per cent of the workforce, according to a special study done by the CSO as part of the quarterly survey. The same number again work from home on an occasional basis.

Teleworkers - people in non-agricultural employment who work from home and need a computer and online access - are twice as likely to be male, with a disproportionate number in managerial and professional positions.