Irish jobless rate at 16-year high as welfare claimants climb to new record

Ireland’s unemployment rate hits 16-year high

DUBLIN — Ireland’s unemployment rate has reached a 16-year high and the total number of welfare claimants has climbed to a new record high, government statisticians reported Wednesday in the latest sign that the country remains in the grip of recession.

The Central Statistics Office said unemployment rose in May to 13.7 percent from the previous rate of 13.4 percent, a level that had held firm through the first four months of the year.

Economists had voiced hope that the unemployment rate would remain stable before slowly reversing later this year, but now appears likely to crack 14 percent, a level last reached in 1994.

The number of people claiming state benefits for joblessness last month rose 1.2 percent to a new all-time high of 437,922. The figure — which includes people in part-time or casual work who remain eligible for unemployment payments — had fallen in March and April from Ireland’s previous record high of 437,000 set in February.

When Ireland previously suffered double-digit unemployment in the early 1990s, its labor force was a third smaller than its current level of 2 million. Ireland’s work force swelled during the Celtic Tiger boom of 1994-2007 when hundreds of thousands of immigrants from Eastern Europe, Asia and Africa settled here, helping to reversing Ireland’s own tradition of mass emigration for the first time. Net emigration has resumed over the past two years.

Unemployment is rising, in part, because of government cutbacks as it strives to control a runaway budget deficit projected to run at 14.3 percent of gross domestic product this year. Credit remains tight amid Ireland’s ongoing efforts to transfer more than €80 billion ($97 billion) in toxic property-related debts to a new state-run “bad bank.”

The inability of loss-making businesses to keep borrowing funds has led to a surge in closures over the past year.

A leading Irish insolvency law firm, Kavanagh Fennell, reported Wednesday that 652 businesses have shut down this year, including 112 last month, chiefly in Dublin. The firm said closures were running 25 percent higher than in the same period of 2009 and the hardest-hit sectors have been construction, hospitality, manufacturing and car sales.

Online:

Unemployment report, bit.ly/RdVnD

Business closures, www.insolvencyjournal.ie/index.aspx