ECONOMIST SAYS UNEMPLOYMENT COULD HIT 15% - It was a dark day both at home and internationally on the jobs front. The Ulster Bank Group announced 750 job losses north and south. But that figure eclipsed by Dutch bank ING which said it was axing 7,000 jobs. And even that figure was overwhelmed by an enormous job loss announcement at the US construction equipment and vehicle maker Caterpillar, which said it was cutting almost 20% of its global work force, resulting in 20,000 jobs axed. 70,000 job cuts were announced by global corporations yesterday as many of them reported falling profits and desperate to get costs under control as the world economy continues to slow.
The only area where jobs were created locally yesterday was at Four Star Pizza which is opening 10 new outlets with work for 200 people. The new stores will be in Letterkenny, Cavan, Dundalk, Blanchardstown, Ballymun, Leixlip, Newry, Armagh, Omagh and Wexford. They will bring the total number of Four Star Pizza outlets to 46.
Friends First economist Jim Power predicts that the unemployment rate may increase to 15% by this time next year and says the country is facing a serious labour market crisis. He said 15% was 'easy to see' by this time next year which would mean 420,000 people signing on the Live Register, compared to almost 300,000 in December. The unemployment rate is currently running at 8.3%, according to December figures released by the Central Statistics Office earlier this month.
Mr Power says it is difficult to see any area of the economy that would be a net job creator over the next 12 months and easy to see areas of the economy losing jobs. He says that most of the economy was contracting including manufacturing, financial services, construction, hospitality and retail while there is a freeze in the public sector. He says that there was a sense of waiting until January to see if times got better before cutting jobs, but adds that he can see many more retail jobs going once the January sales are over.
He says the recession is feeling like a depression because so many people know friends and colleagues who are losing their jobs and starting to feel very nervous about their own job prospects.
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IRISH BANKS CONTINUE TO LOOK AT HEADCOUNTS - Ulster Bank, one of the larger players in the Irish market yesterday, announced 550 redundancies here and and a further 200 in the North. Permanent TSB, owned by Irish Life and Permanent, had an initiative last year offering staff up to €35,000 to go on two years' leave of absence. The idea was designed to appeal probably most to single people in the bank who might yearn to try out pastures new. A spokesman yesterday said that over 100 staff members had taken up the offer, which he said was better than had been anticipated. The unions say closer to 150 people took the offer.
A spokesman for AIB Group said there are no plans for a similar scheme. The bank is not hiring unless it has to fill a post needing a skill that can not be filled internally. Bank of Ireland, which has just under 16,000 staff at the last official published figure, is thought to be planning to launch something similar to what Permanent TSB offered along the lines of sabbaticals and facilitating part time working.
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MORNING BRIEFS - US drugmaker Pfizer is to buy rival Wyeth in a deal worth $68 billion, the two companies have announced. It is speculated the deal could see 20,000 jobs cut from the newly combined workforce. Paul Duffy, Pfizer's head of manufacturing in Ireland, says it was too early to say what his company's takeover of Wyeth would mean for Irish jobs.
*** On the currency markets, the euro is worth $1.3266 and 93.76 pence sterling.
