30/8/2014: Both Unemployment and Participation Rates Fell in Q2 2014

In the previous post, I covered duration of unemployment across age cohorts data for Q2 2014. This time around, let's take a look at labour force participation rates and unemployment rates.

As noted earlier, there are some good news in the latest QNHS data. And this theme continues with unemployment rate statistics.

Official unemployment rate has declined from 12% in Q1 2014 to 11.5% in Q2 2014 (seasonally-adjusted basis). Thus, Q/Q unemployment rate dropped by a substantial 0.5 percentage points, which is faster than the 0.2%points decline in Q1 2014 compared to Q4 2013. It is worth noting that in Q2 2013, Q/Q decline in seasonally-adjusted unemployment rate was shallower 0.1 percentage points. Overall, over H1 2014, unemployment rate declined by 0.7 percentage points compared to the end of 2013. Over the same period of 2013, decline was 0.6 percentage points.

Without seasonal adjustment, things are slightly different. Y/Y Q2 2014 unemployment rate is down 2.1 percentage points and in Q1 2014 the same decline was 1.7 percentage points. These rates are faster than the rates of y/y declines in unemployment for the same period of 2013.

All of which is good news as illustrated by the chart below:

Things are not as good on the participation rates front, however.

Non-seasonally-adjusted Participation Rate fell from 60.5 in Q2 2013 to 60.0 in Q2 2014. H1 2014 average participation rate was 59.85 against H1 2013 average of 60.0, H1 2012 average of 59.9 and H1 2011 average of 60.1, in H1 2010 the average was 60.8, in H1 2009 it was 62.2 and so on... Q2 2014 participation rate was lower than Q2 2011 reading of 60.5. By all metrics, participation rate has fallen and not just y/y, but also compared to other periods of the crisis.

On seasonally-adjusted basis, Participation Rate also fell, from 60.1 in Q1 2014 to 59.8 in Q2 2014. This marks the lowest Q2 participation rate since Q2 2000. Last time seasonally-adjusted participation rate expanded in Ireland was in Q2 2013.

Chart below to illustrate:

As chart above illustrates, the bad news is that participation rate is not growing and is basically flat since Q2 2011. Worse news is that it is now matching the crisis period low. Even worse things is that the participation rate is running below historical trend in every quarter since Q2 2010. Guess those higher taxes, as well as high cost of childcare for families, are keeping people out of the labour force (remember, labour force includes employed and unemployed workers who are searching for a job).

Or by definition: The labour force participation rate is computed as an expression of the number of persons in the labour force as a percentage of the working age population. The labour force is the sum of the number of persons employed and of persons unemployed.

So in basic terms, of every ten persons of working age, six are either employed or unemployed, and four are neither working nor seeking a job. At the peak of the Celtic Tiger, the ratio was 6.4 to 3.6.

30/8/2014: Irish Unemployment: The Plight of Long-Term Unemployed Older Workers

Some blogposts based on the latest QNHS data for Q2 2014 are due next, so to start with:

Duration of Unemployment in Ireland:

Two tables below summarise y/y and current on Q1 2011 (tenure of the present Coalition Government) changes in unemployment by age groups and duration of unemployment.

Couple of things worth mentioning (keep in mind, analysis of other aspects of unemployment are to follow, so we are focusing here on duration of unemployment):

1. Overall unemployment declined. This is good news, albeit not very new nor very interesting.
2. Y/y there were more significant declines in long-term unemployment for all those in the labour force (year on year, down 16.3% for those unemployed 1 year and over as opposed to a decline of 15.4% for those in unemployment in general). 
3. There were comparable declines in unemployment compared to Q1 2011 for those in long-term unemployment (down 17.2%) as for all unemployed (down 17.3%).
4. Caveat to (2) and (3) above: while these are good numbers, longer term unemployment declines are more heavily influenced by drop outs from the workforce than other durations.
5. In year-on-year terms, 15-24 years old have performed significantly better than average in terms of declines in unemployment of any duration and somewhat better than average in terms of declines in long-term unemployment. This suggests that some component of the current younger long-term unemployed is still structural - and cannot be easily removed by switching them into either education, training or into new jobs. Younger long-term unemployed also performed better than average for their reference group in terms of current levels compared to Q1 2011. This suggests that there have been some successes in shifting younger people off unemployment and longer-term unemployment too. Which is good news.
6. In year-on-year terms, mid-age group of long-term unemployed outperformed the average in terms of declines in unemployment (-20.9% against -16.3% average). But overall declines in unemployment in this group are basically around average (-15.8% against -15.4% for the overall group). Things are better for this category of workers both in short and long-term unemployment when compared to Q1 2011. Again, this is good news.
7. Bad news are for the category of workers 45 years of age and over. Why? In year-on-year terms, their unemployment rates declined less than across all age categories (-11.8% for all 45+ years of age against -15.4% for all workers) and in comparison to Q1 2011, their unemployment levels are higher (+2.7% for all 45+ years of age against -17.3% for all workers). Even worse news are for the long-term unemployed workers of age 45 and over: their unemployment rates declined much less than across all age categories (-8.1% for all 45+ years of age against -16.3% for all workers) and in comparison to Q1 2011, their unemployment levels are significantly higher (+14.4% for all 45+ years of age against -17.2% for all workers). This is the bad news: older workers are becoming increasingly less and less employable and the jobs being created in the economy, as well as training and activation schemes made available by the state are not working for this group.

Thus, overall, share of longer-term unemployed is declining, but remains still very high, while share of the long-term unemployed in the older age cohort of workers is rising:

The problem of long-term unemployment is bad enough - unemployment of duration in excess of 6-12 months has very long-term effect on employability of the workers, their skills, their psychological well-being, but also permanent effect on their wages and the probability of future jobs losses spells, and so on. The problem of long-term older workers is worse. Workers left without the job for a year or so, whilst in their older age are facing much greater barrier to re-entry into the workforce and suffer much more significant losses to their pensions, health status and social standing than their younger counterparts. They are also much harder to re-train and up-skill, so activation programmes generally designed to deal with the acute unemployment crises are not suitable for their needs. 

Stay tuned for more analysis of QNHS figures.

29/8/2014: Stability... of Negative Growth: Euro Area in Historical Perspective

Washington Post has a nifty chart plotting the demise of Europe... http://www.washingtonpost.com/blogs/wonkblog/wp/2014/08/20/worse-than-the-1930s-europes-recession-is-really-a-depression/

Here it is:

That's not just 'periphery' up there in black. It's the entire euro area, with the stellar performer Germany, solid Austria and exports-rich Belgium and the Netherlands, competitiveness-leading world superstar Finland, the best-educated country in the solar system Ireland, and on... and on...

It has been 6.5 years since euro GDP been below pre-crisis levels. And things are getting worse, not better as we speak.

Remember, this is supposedly the European Century, per comfortably overpaid outgoing EU Commission. This is the Age of Europe, per majority of the comfortably overpaid incoming EU Commission. This is the state of delusion. 

29/8/2014: While New Financial Sanctions Loom

When America sneezes, Europe catches a cold… These days, America is more pointing than sneezing, and Europe is heading for the bite rather than a cold. The bite of sanctions against Russia.

Yesterday, at an advisory call I highlighted the details of potential impact that deeper financial sector sanctions against Russia can have on Russian banks and investment. You can read more on the topic here: http://trueeconomics.blogspot.ie/2014/08/2882014-state-of-russian-economy.html

In my view, the damage can be heavy. And this was based on the US proposals being aired around to ban Russian banks' access to short-term funding and derivatives markets.


Today, the UK joined the chorus of 'throw Russian financial system into the dark ages'.

Let's start from the latter.

The UK is planning to push EU leaders to ban Russian access to the Society for Worldwide Interbank Financial Telecommunication system, commonly known as SWIFT. If SWIFT access for Russian banks is interrupted, the impact will be big. Cross-border banking will become excruciatingly expensive and limited for Russian companies and banks, including all companies and banks - whether sanctioned explicitly, or left off the list of sanctions to-date. Trade flows and payments will be disrupted too.

Russia has been preparing for this already, having announced back on August 7 that it is working on creation of the domestic system for banks transfers and data transmissions.

Swift is a 'worldwide' system because it is used worldwide, covering 215 countries, but the company is incorporated under the Belgian law and as such is a hostage to the EU, which did block Iranian banks' access to the system back in 2012. This raises a major point for the stability of the global financial system: a major technical part of it is a de facto subject to the political choices of the EU.

If Russia succeeds in developing its own system (and it is hardly nuclear science to put one together) and, as planned, if it were to wire China into it too to cover settlements in yuan and ruble, there will be two repercussions that the UK leadership is not considering:

1. Much of flows between Russian banks and flows with other partnering banks will fall outside the normal international system that offers some transparency; and
2. The system can create a new competitor to SWIFT - a competitor outside the regulatory net of the Western authorities. 

Meanwhile, the US is pouring over its own 'solutions'. As was reported earlier this week, the US is looking into limiting derivatives trading (including commodities options and futures, plus currency derivatives) and short-term loans for Russian corporates and banks.

So far, sanctions have impacted only longer-term debt issuance by the companies listed explicitly on the sanctions list, but also cooled off other Russian corporates' access to the US and European debt markets, despite them not being on the list. Bloomberg reported earlier this week that  Russian companies placed only USD4.1 billion of bonds abroad since mid-March 2014, which is less than a fifth of issuance in the same period last year.


Combined, the two approaches will impose a significant cost onto Russian economy. More importantly, the measures will disrupt legitimate, non-sanctioned (to-date) ordinary day-to-day business conducted by Russian companies. They will also put pressure on Russian funds outside the country, including ordinary savings, small business funds and investments. The sanctions, if passed, will have to be matched by Russia, and it is very hard to imagine what the co-measurable response can be.

Bigger issue, of course, is that sanctions are not only unproductive in achieving the Western goal of stopping Russian engagement in Ukraine, but are actually counter-productive. Ukraine is a geopolitical conflict theatre today, not an economic one. And the conflict goes across three core points:

1. Russia's security in the face of encroaching Nato - including the 2002 Nato-Ukraine Action Plan, the 2005 Intensified Dialogue, the 2008 Bucharest declaration that effectively invited Ukraine to join Nato "when it wants to join and meets the criteria for accession"and so on - all temporally pre-dating December 2013.
2. Russia's sense of humiliation suffered over the last 24 years, compounded by the endless nationalist and Russophobic rhetoric emanating from a number of Eastern European countries and promoted by the West in the 1990s and 2000s and 2010s, including tolerance of the EU over the third-rate citizenship status for Russian-speaking 'minorities' in some Accession States, and
3. The failed state of Ukraine.

I am not going to expand extensively on any of the above points, let the historians deal with them, but it is clear that none of them have anything to do with economic conditions in Russia. However, all of them are being only reinforced by the sense of political and popular consolidation that is sweeping across Russia today, triggered in part by the sanctions. The current leadership of Russia is actually being helped, not harmed by the sanctions precisely because their imposition and acceleration continue to remind ordinary Russian people that points (1) and (2) are valid. They need no reminder that point 3 is valid as millions of Ukrainians work in Russia, trying to make some sort of a future that is simply infeasible in Ukraine itself.

In a nutshell, anyone who knows Russian history also knows that Russian culture, history, social institutions - all rest on the foundations of securing unity in adversity. The more adversity you throw Russian way, the greater consolidation the Russian system will achieve.

Time to smell the roses, folks. The West will not [rightly] put its own boys-in-uniforms into Ukraine to protect the Maidan Government. The West [for want of funds and will] will hardly even pay the cost of rebuilding the Ukraine. The West [for lack of capability absent any serious Federalist reforms in the country] is not going to create a functional state out of the failed one. Ukraine is not Latvia or Estonia. Expecting a functional democracy to emerge in a large state fragmented by linguistic, ethnic, cultural, historical and social divisions of the magnitude that prevail across the Ukraine without some sort of a Federal state not anchored in chauvinistic nationalism exercised by either side is naive. Iraq is a model here, not Czechoslovakia.

Time to smell the roses, folks. Time to do something along these lines: http://trueeconomics.blogspot.ie/2014/08/2682014-ukraine-road-map-toward-de.html

29/8/2014: Some Unpleasant Forecast Revisions for Russian Economy

Russian Economy Ministry updated its 2014-2015 economic forecasts. 2014 forecast for real GDP growth remains at 0.5%, a notch below 0.6% forecast by the Central Bank. The ministry lowered forecast for 2015 to 1%, from 2% previously.

Notably, the Ministry did not raise its GDP growth forecast for 2014, despite numerous recent comments by Ministry officials that they expect 2014 GDP to come in at closer to 1% growth.

Updated inflation forecast is for 7-7.5% y/y in 2014. This reflects an uplift of 1-1.5% on previous forecast (6%) and is 1.5-2% above the official CBR target. CBR own forecast is for 6% for 2014. Revisions in inflation forecast are down to impact of imports bans on food which is expected to add 1% to the inflation rate in 2014 and 0.5% in 2015. Furthermore, sales tax introduction in 2015 (on top of 18% VAT already in place) will add another 1% to inflation. Ministry 2015 forecast for inflation is now at 6-7% which is an increase of 1-2% on 6% forecast issued previously. CBR target for 2015 was 4.5%.

You can read more about GDP growth conditions, inflationary pressure and the impact of the imports ban in food sector here: http://trueeconomics.blogspot.ie/2014/08/2882014-state-of-russian-economy.html

Analysts consensus forecast is for 0.3% GDP growth and inflation of 6.5% in 2014. The latest forecasts from the Ministry suggest that there will be serious revisions to the Budget for 2015.

Growth in retail sales for 2015 is forecast to fall to 0.5% (latest growth of around 1%), while fixed investments is forecast to increase by 1.5% (current rate is -2%). Ministry projects a nearly 8% drop in Russia’s imports this year, in line with 'normal' Russian economy's reaction to a growth slowdown and in a clear response in capital imports demand to higher CBR rates. Investment is forecast to return to growth of less than 1% in 2015. 

29/8/2014: Tea-leafing at ECB: Someone Takes Them Seriously...

This chart, courtesy of Credit Swiss, via @FGoria shows y/y Euro area HICP inflation against ECB projections for the same:

This has to put sorcery and fortunetelling to shame...

29/8/2014: Eurocoin Signals Further Slowdown in Growth in August

August the €-coin - a lead growth indicator for euro area GDP - fell to 0.19 from 0.27 in July, continuing the trend that began last spring.

Last month Eurocoin coverage is here: http://trueeconomics.blogspot.ie/2014/08/1482014-yugo-area-economy.html

Per CEPR and Banca d'Italia release, "The decline of the indicator reflects the weakening of economic activity in the second quarter and the recent worsening of consumer and business confidence, although the flattening of the interest rate curve made a slightly positive contribution."

This comes as further bad news for the euro area that has been posting some pretty awful macro data for some months now.

Eurocoin latest decline is marks the fourth consecutive month of no growth in the indicator. The stock market performance component of the indicator is holding it above the zero line, but August reading is no longer statistically distinguishable from zero growth. Once stock markets effects fizzle out, there will be little left to support indicator.

In Q1 2014, the eurocoin indicator averaged 0.35 against actual GDP growth coming at 0.2%, in Q2 2014, the indicator averaged 0.34 and actual growth came in at 0.0%. So far in Q3 2014 we have two months-average of 0.23, suggesting that factoring out stock and bonds markets / interest rates performance from the indicator we have negative growth closer to -0.05-0.1%.

Bond markets are currently out of touch with reality. Take Italian auction this week. EUR2.5 billion of 2019 BTPs sold at a yield of 1.1% - down from 1.2% in July 30 auction, EUR4 billion worth of 2024 BTPs sold at 2.39%. This has nothing to do with the country fundamentals that are all flashing red. Italian unemployment is now up 0.3% m/m to 12.6% in July with youth unemployment down 0.8% on June at a massive 42.9%. Retail sales fell 0.1% in June, compared to May, for non-food items and Q2 average was down 0.2% on Q1 average. Business confidence is tanking, having fallen from 90.8 in July to 88.2 in August. Inflation is (flash estimate for August) at -0.2% m/m and y/y, worse than -0.1% consensus expectations. And so on...

Inflationary signals are also weak: August data we have so far shows German inflation at 0.8%, Spanish at -0.5%, Belgian at 0% and Slovenian at 0%. Update: Euro area flash estimate for inflation is now down to 0.3% from 0.4% in August weighted down by energy costs and food.

Some charts to illustrate the Eurocoin performance:

You can see the weakening growth trend in the above, incorporating the latest growth forecast for Q3 2014. This puts even more pressure on the eCB which has already used up all conventional (rates policy) tools without much of a positive effect on growth:

And to remind you all - euro area growth record is abysmal to begin with, even with 'good years' factored in:

28/8/2014: Draghi at Jackson Hole: Not 'too little' but may be 'too late'...

Earlier this week I gave a comment for the Portugal's Expresss magazine article on ECB policy: http://expresso.sapo.pt/mario-draghi-descola-da-austeridade-demasiado-tarde=f887024

Here is the full comment I provided:

Q: Can we talk of a “change” in the mood regarding austerity policies after the Draghi’s Jackson Hole speech – too little is worse than too much?

A: Mario Draghi's speech at Jackson Hole was significant for a number of reasons.

Firstly, it is an important signal of the ongoing gradual re-orientation of the ECB attention away from technical inflation targeting toward more detailed consideration of the inflation-leading fundamentals. Technical targeting is still there, but the focus is moving toward the real economy. This is a signal that reinforces, tacitly, previous policy bases, especially the concept behind the TLTROs as opposed to traditional LTROs, as well as the structured asset purchases programme currently in design.

Secondly, the speech clearly signalled the ECB's return to direct opposition to the EU-led structural reforms policies. Specifically, Darghi's focus on unemployment signals growing frustration within the ECB that structural reforms are not working due to their poor implementation, unambitious design and for cyclical reasons. While the media opted to focus on the latter point, dealing with the issues of cyclical timing, and thus with 'austerity' policies, in my view, longer term perspective inherent in Mr Draghi's emphasis on unemployment warrants the view that the ECB is once again moving to pressure Euro area leaders to stay the course of reforms over the long run, even if temporarily opening the door to easing the pressures of reforms in the immediate future.

The above two points are very clear from Mr. Draghi's discussion of structural vs cyclical economic impacts of the Great Recession.

Thirdly, it is also clear that Mr. Draghi is positioning ECB closer and closer to deploying an outright large scale quantitative easing (QE). However, he is painfully aware of the fact that traditional QE will risk pushing Euro area sovereigns further away from the necessity to enact painful reforms and that political cycle is starting to reinforce misdirected economic incentives. Furthermore, he is aware that current yields on Government bonds are not only benign, but outright exuberantly optimistic. Thus, the issue, in Mr. Draghi's view, is not how much QE is needed, but rather of what type - a choice being between the traditional QE (sovereign channel), LTROs-based QE (banking channel), asset buying and TLTRO (private supply side channel) or deleveraging supports (private demand side channel).

The problem with ECB's current stance is exactly that its policy innovations so far ignored the last channel which represents most direct route to stimulating demand and investment, and are yet to specify the penultimate channel which represents direct route to a supply side stimulus.

On the balance, Mr. Draghi's speech was far from being 'too little', although it still might be 'too late'. He touched the most important issue bridging supply and demand sides of the economy - employment - but as he notes, structural dimension of unemployment in Europe makes it very hard for the ECB to enact a traditional set of policy tools suitable more for reducing cyclical unemployment.

28/8/2014: The State of Russian Economy

I published a lengthy note summarising my view of the state of Russian economy on the LongRun Economics Blog: http://trueeconomicslr.blogspot.ie/2014/08/2782014-russian-economy-outlook.html

The post looks at:

• Russian GDP growth
• State of Russian foreign reserves
• Central Bank policy interventions
• Capital outflows
• Funding situation for Russian banks and corporates
• Russia's external balance
• Federal Government finances
• Problems with imports substitution 

The summary is:

Russian economy is showing signs of stress, both in structural terms and in terms of the fallout from the Ukraine crisis.

In structural terms, reforms of 2004-2007 period now appear to be firmly shelved and are unlikely to be revived until the sanctions are lifted and some sort of trade and investment normalization takes place. Structural weaknesses will, therefore, remain in place.

In dealing with the crisis fallout, even if Russia were to switch to self-sufficiency in food production and tech supplies for defense sector and oil & gas sector, as well as re-gear its corporate borrowings toward Asia-Pacific markets, the reduced efficiencies due to curtailed trade and specialisation are likely to weigh on the economy. There is absolutely no gain to be had from switching the economy toward an autarky.

Politics aside, it is imperative from economic point of view that Russia starts to make active steps to disentangle itself from Ukrainian crisis. Rebuilding trade and investment relations with the West and Ukraine – both very important objectives for the medium term for Russia – will take a long, long time. It’s best to hit the road sooner than later.

Please note: this is not a note designed to deal with geopolitical crisis unfolding in Ukraine or Russia's role in the crisis. Here, I deal with economics.

27/8/2014: Irish Property Markets: Some Foam Under the Cork...

Time to worry is… about now… or rather in a couple of months...

Irish residential properties price index for July was released by CSO. The data is showing continued established trends in prices recovery with further amplification in the worrying trends of double-digit y/y increases in Dublin property prices. While I generally prefer to provide more detailed analysis on a quarterly data, which will be available at the end of October, the current rates of increases in prices are now worrying and deserve at least a brief comment.

Overall, National Residential Prices Index rose to 75.3 in July 2014, which is up 13.4% y/y. July marks third consecutive month of double-digit y/y increases in prices. And the rate of increases is accelerating for the fourth consecutive month. This is worrying. The level of index remains low - 42.3% off its pre-crisis peak and only 17.47% up on crisis trough. But cumulated 24 months gain is now 16.0% (an annualised rate of increases at 7.71%). Thus, as I noted before, the main concern is not the level of prices, yet, but the the rate at which prices are moving up.

Furthermore, the rate of price increases in the Apartments segment of the market is clearly outstripping price increases for houses in all months since June 2013, with exception of February 2014. This too is worrying as this suggests investment motives buying acting strongly to push prices up for rental properties. The result will likely be misallocation of investment and rising rents.

In Dublin, the growth rates are even of greater concern.

Once again, levels are not a problem: Dublin residential properties index currently sits at 76.6 which is 43.5% lower than pre-crisis peak and 33.68% higher than crisis period trough. Dublin fell hardest and fastest of all markets in Ireland during the crisis, so it is bouncing back now faster too. So much is fine. But the rates of increase in prices y/y are now running at double digits for 12 consecutive months in a row, with last three months the rates of prices increases in Dublin at above 21 percent. sooner or later it will be time to call this a 'feeding frenzy' and if the credit supply to the sector were to improve, all stops will be pulled out of the buyers. Psychology here is not pretty.

So is it 'finally' time to call this a bubble? Not yet. I will make my next call on this on foot of September data (due in October), but in general, the levels of prices are still benign compared to pre-crisis peaks, pre-bubble trends and the 'natural rate' of price increases that can be expected to prevail from the 1990s on. But I am beginning to worry that a combination of:

1. Tight supply of suitable properties
2. Rising rents and lack of retail investor professionalism in structuring functional investment portoflios
3. Psychology of the buyers, reinforced by the media and real estate agents commentary, 
4. Expectations of further tax easing in the Budget 2015, especially targeted to property markets, and
5. Continued accumulation of cash in certain sub-sectors of economy

are all adding up to a rising pressure on the investors and buyers to go into the market to secure 'any' deal at 'any' valuation as long as it is remotely affordable.

This is not a 'champagne cork' moment, yet, but we have lots of foam in this market, with little to slow down the cork for the moment...

27/8/2014: Irish Migration Trends by Nationality: 2014

In the previous post I covered aggregate migration and population data for Ireland for 2014 (data coverage is 12 months through April 2014). The post is available here: http://trueeconomics.blogspot.com/2014/08/2782014-migration-population-change-in.html?spref=tw

Now, as promised earlier, lets take a look at the decomposition of the migration data.

First, net migration by nationality:

• Total emigration from Ireland in 12 months through April 2014 stood at 81,900, which is down from 89,000 in the same period 2013 (a decline of 7,100). This marks the first year of decrease in emigration since 2011.
• 40,700 Irish nationals emigrated from Ireland in 12 months through April 2014, down 10,200 on the same period of 2013 and marking the first slowdown in outflows since 2008. Latest rate of emigration for Irish nationals is the lowest reading since 2010.
• Over the 12 months though April 2014, 2,700 UK nationals emigrated from Ireland - which represents a decline in emigration rate for this group of residents of 1,200 y/y. However, this decline was more than off-set by the rise in emigration of 'Rest of EU-15' residents which rose 4,100 y/y to 14,000 in the 12 months through April 2014. 
• The rate of emigration from Ireland for EU12 Accession states nationals slowed down from 14,000 in 12 months through April 2013 to 10,100 in 12 months through April 2014.
• For non-EU nationals, the rate of emigration has accelerated to 14,400 in the 12 months through April 2014 from 10,300 in the same period of 2013.

Thus, for the fifth year in a row, Irish nationals represented the largest group of emigrants from Ireland by total numbers. However, if in 2011-2013 Irish nationals represented more than 50% of the total emigration numbers, in 2014 this fell to 49.7%.

Net emigration figures, however, were less encouraging for the Irish nationals.

• Total net emigration from Ireland stood at 21,400 in 12 months through April 2014, down from 33,100 in April 2013.
• Irish nationals' net emigration rate was running at 29,200 in the 12 months through April 2014, down from 35,200 in 2013, but still above the rate recorded for any other year since 2006.
• In contrast with the trend for the Irish nationals, UK nationals posted another year of rising net immigration into Ireland: 2,200 more UK nationals now reside in the country compared 1,000 more in 2013. Rest of EU-15 group posted an increase in the rate of net emigration from Ireland in 2014 (-5,300) compared to 2013 (-2,500). This made 2014 the worst year for net emigration of this group out of Ireland on record.
• Net emigration of the EU12 Accession states nationals fell to its lowest crisis-period level of 200 in 2014, down from 3,200 in 2013.
• Non-EU nationals recorded net immigration rate of 11,200 in 2014 which represents the highest rate on record (since 2006).

Chart below shows cumulated changes in migration over the period of 2008-2014:

27/8/2014: Migration & Population Change in Ireland: 2014 data

Population and migration estimates for the 12 months period through April 2014 have been finally released by the CSO with a lag of some 4 months. The figures show some marginal improvement in the underlying trends compared to the disastrous 2013, but overall the situation remains bleak.

Let's start with top level figures first and deal with compositional details in the subsequent post.

Births numbers have fallen to the levels last seen in 2007, from 70,500 in 2013 to 67,700 in 2014. Improving labour market and deteriorating personal finances are more likely behind the trend: the former means lower incentives to stay out of labour market and lower incentives to take maternity leave protection, while the latter means increased pressure to generate second income in the family, which is, of course, automatically associated with having to pay extortionate childcare costs. Whatever the drivers are, this is the births rate peaked in 2010 and has been declining since, neatly tracing out labour markets developments. 2014 marks the first year since 2007 that the rate is below 70,000.

Deaths are running at the rate proximate to 2013 and not far off from 2012. This means that the Natural Increase in population has slowed down to 37,900 in 2014 from 40,800 in 2013 and this marks the lowest natural rate of increase since 2006 and the first sub-40,000 rate of increase since 2007.

Immigration rose in 12 months through April 2014 to 60,600 from 55,900 in the 12 months through April 2013. 2014 figure is the highest since 2009. Emigration declined to 81,900 in 2014 against 89,000 in 2013. This is the lowest level of emigration since 2011 when outflow of migrants from the country was running at 80,600.

Net emigration also moderated in 12 months through April 2014, declining from 2013 level of 33,100 to 2014 figure of 21,400. This marks the lowest net emigration rate for the entire crisis period. Which is, undoubtedly, good news. Bad news, we are still in net emigration mode.

With slower rate of net emigration outflows, net change in Irish resident population was positive in 12 months through April 2014, recording an increase of 16,500 y/y, compared to 7,700 rise in 12 months through April 2013.

A chart to illustrate:

Meanwhile, cumulated 2009-2014 emigration amounted to 479,800, cumulated net emigration for the same period amounted to 142,200. These are actual figures recorded. Taking into the account the trends in Irish migration over 2000-2007 period, the 'opportunity cost' of the crisis is the *net* loss of some 521,000 residents relative to where the population could have been were the trends established in 2000-2007 to remain in place.

A chart to illustrate:

As the result of the above changes in actual migration and natural rate of increases in population, we have the following changes in the working and non-working age populations:

• Working-age (20-64 year olds) population stood at 2,728,300 as of the end of April 2014, down 14,500 on a year ago and down 64,200 on 2008.
• As percentage of the total population, working-age population is now standing at 59.2%, the lowest for any period since 2006.
• Non-working age population is up 31,300 to 1,881,600 in 2014 compared to 2013 and up 188,900 on 2008.
• Non-working age population now stands at 40.8%, up on 40.3% in 2013 and the highest for any period since 2006.

Charts to illustrate: