The number of people signing on for jobseekers' payments hit a record high of 327,860 in January, bringing unemployment to a 13-year high of 9.2 per cent.
A recent 36,498 people signed on for the first time last month, as companies shed staff after Christmas, according to Live Register data released today by the Central Statistics Office (CSO).
The number of people signing on rose 12.5 per cent last month, the second highest recorded increase, behind a 14 per cent rise in December 1971.
The rise in those signing on last month compares with increases of 22,800 in December and of 11,000 in January 2008.
The CSO said that the estimated unemployment rate has now reached 9.2 per cent, up from the December estimate of 8.3 per cent, after an increasingly grim year for the jobs market.
Alan McQuaid, chief economist with Bloxham Stockbrokers described the figures as “simply horrendous” and said the “Irish economy is now in crisis mode”.
“They should also be a wake-up call to public servants who may be feeling sorry for themselves after yesterday’s pension levy and pay freeze that at least they have the security of guaranteed employment.”
He said what had started as a building industry problem has “spread like wild fire across other sectors of the economy”. Sectors like manufacturing, retail, transport, and financial services are starting to significantly feel the pinch too, Mr McQuaid said.
The rising number of unemployed was also undermining the public finances through lower tax receipts and increased social welfare payments.
Mr McQuaid said it costs the economy between €11 million and €11.5 million for every 1,000 additional people on the live register. Given the extent of the job losses he said there was now a strong argument for the Government considering trade-off measures, such as cutting employers’ PRSI, to boost employment and protect existing jobs.
The last time this level was exceeded was in December 1997 when the unemployment rate was 9.3 per cent. The highest unemployment in the State the 15.7 per cent recorded in May 1993.
Lynsey Clemenger, Ulster Bank economist, said it was possible the January figures “may represent a spike as a result of a particularly pronounced shakeout in employment after the Christmas holidays”.
The fact that so many of the new claimants were men was a clear indication that construction-related lay-offs are continuing at a fast pace, she said. Given the pace of job losses she said unemployment was expected to hit 10 per cent in the coming months.
Mark Fielding, chief executive of ISME said the country was “staring into the abyss” and he was concerned that there were no measures in yesterday’s Government measures to support enterprise or maintain jobs.
"As the dole queues lengthen and businesses close, it is absolutely essential that initiatives are immediately announced to address our lost competitiveness and in particular the business cost environment, one of the highest in the OECD,” he said.
Rossa White, chief economist with Davy Stockbrokers said the live register data completes a miserable triumvirate of economic data; following a 67 per cent fall in new car sales and a 19 per cent decline in tax revenues. He said the January increase was double the previous highest levels.
Ibec has called on the Government to divert funds committed to the National Development Plan towards supports to business to improve their competitiveness and prevent further massive job loses.
More than double the number of men at 22,900 signed on last month compared to women at 10,100 indicating weakness in male dominated industries such as construction.
During the 12 months to January 146,412 people joined the live register, a rise of 80.7 per cent.
The 80 per cent annual spike in unemployment benefit claimants is the worst on record, exceeding the 39 per cent rise in claimants in 1980. On a seasonally adjusted basis, the Live Register rose by 33,300 people last month to a total of 326,100.
The total number of people on the register is the highest in absolute terms, surpassing the previous record of 302,000 in January 1998.
