Adjusted unemployment falls slightly in May to 26.1% – CSO

Unemployment, adjusted to account for those on the Pandemic Unemployment Payment, fell slightly in May to 26.1%. This compares to 28.2% in April.

The percentage of younger people unemployed continues to be high with 51% of those 15-24 out of work compared to 22.5% of those aged over 25.

The Central Statistics Office reports that the standard measure of unemployment rose to 5.6% in May.

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Research finds homebuyers are confident despite interruption to market

Those looking to buy a house remain confident about their ability to do so, despite the interruption to the market as a result of Covid-19.

That’s according to a new survey by property website MyHome.ie.

It found that 68% of prospective buyers are still planning on purchasing a new property in the next year.

Six out of ten respondents believe next year will be a good time to buy, while 37% expect prices to drop by over 10% in the next year.

The 1,981 respondents were asked what factors would encourage them to buy a property now.

35% said more available houses, 33% said more overall confidence in the economy, and 33% also said an easing of mortgage lending rules.

The Covid-19 pandemic is expected to have a significant long-term impact on how we purchase property.

59% of respondents said they believe the virus outbreak will lead to more online processes in general to minimise contact, while 21% said they believe it will lead to quicker sales in general.

Half of the respondents said they believe online viewings and virtual tours are effective ways to view a property.

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Number of people on Pandemic Unemployment Payment drops by 36,200

The number of people claiming the Covid-19 Pandemic Unemployment Payment has fallen to 543,200 – a drop of 36,200 in the last week, according to the latest figures from the Department of Employment Affairs and Social Protection. 

Of  those receiving the payment today, 28,400 have notified the Department that they are returning to work. 21,100 of these will receive their last PUP payment this week

A further 214,700 people were on the Live Register and receiving Jobseekers Benefit at the end of April. 

Today’s figures mark a significant improvement compared to the peak demand for the PUP, which hit 598,000 some weeks ago.

The fall in claims reflects the first phase of reopening the economy which commenced on 18th May, with outdoor sectors including construction returning to work. 

While the numbers receiving the PUP have fallen, the number of those having their wages subsidised under the Temporary Wage Subsidy Scheme (TWSS) has now topped half a million, with over 508,100 having received at least one support payment towards their salary.

The Minister for Employment Affairs and Social Protection, Regina Doherty  said the peak demand for the PUP had now passed “…in parallel with the flattening of the Covid-19 curve.”

She forecast that “… each week, if the current progress on the health front holds firm, we will see an incremental drop on the numbers in need of this assistance.”

 However, the Minister cautioned that not everyone would be able to return to work in the shorter term, and noted that the PUP will be extended beyond the original end date of 8th June.

However, she also flagged that the government would “soon” be bringing forward proposals for reforms to the scheme. 

“As we gradually move through all the phases of reopening our society, we do need to review the nature of the Pandemic Unemployment Payment and how it fits into cross-Government plans to keep Ireland healthy and get the country working again,” she said. 

“Any future decisions will be based on our commitment that everyone who needs help will get the most appropriate assistance and also based on the ongoing progress we experience from the reopening of the economy,” she added.

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495,100 employees in receipt of Temporary Wage Subsidy Scheme

Just under half a million workers have had their pay subsidised under the government’s Temporary Wage Subsidy scheme at a total cost of €1.244 billion, according to the latest figures from the Revenue Commissioners. 

Over 57,200 employers have now registered for the scheme, of whom over 50,500 have already received subsidy payments.

According to the Revenue Commissioners, over 495,100 employees have received a subsidy since the TWSS began. 

250,600 employees received a subsidy in the last week, and 410,000 employees are currently being supported by the scheme, having received a subsidy in their most recent pay period.

The Revenue Commissioners described today’s figure of 410,000 workers as ” …a lower bound estimate and will increase as end of month payslips are received for monthly-paid employees.”

The €1.244 billion cost of the TWSS includes €122 million in income tax refunds paid out during the same period.

81% of workers in the TWSS are receiving some degree of “top-up” from their employer. 

While 31,100 workers have left TWSS-subsidised employment and are now receiving the €350 per week Pandemic Unemployment Payment, 40,200 people have closed their PUP claims to move back into TWSS-subsidised jobs.

A further 53,200 have left TWSS-subsidised work, with 34,100 in non-TWSS jobs with the same employer, and 3,800 in non-TWSS work with a different employer.

300 have moved to Jobseekers’ Benefit, and 1,600 are now receiving Illness Benefit. 

The Revenue figures (which exclude the public sector and workers receiving occupation pensions) clearly indicate the dramatic extent to which both workers’  incomes and tax revenue have dropped since the Covid-19 crisis began. 

In January, 1.9 million workers received total gross pay of €6.187 billion, averaging €3,249 per worker per month. 

However, based on preliminary data for April reflecting substantial job losses, 1.61 million workers (almost 300,000 fewer) earned gross pay of €4.745 billion – with average monthly pay falling to €2,947. 

The state has also lost out significantly on tax. 

The total income tax take in January from workers was €1.077 million – but by last month, that had fallen €842 million. 

The €211 million in USC paid in January fell to €169 million last month, with Employee PRSI decreasing from €220 million to €166 million over the same period. 

The state revenue from Employer PRSI reduced from €595million to €423 million.

However, the figures are even more stark for employees covered by the TWSS, who must earn less than €76,000 to qualify for a wage subsidy. 

In January, 470,000 such workers earned total gross pay of €1.347 billion, averaging €2,852 per month. 

By April, that had plummeted to total gross pay of €511 million, or a monthly average of €1,096. 

The income tax take from such workers collapsed from €170 million in January, to a shortfall of €24 million.

TWSS workers paid USC totalling €35 million in January, but in April, the state took in just €2 million from them. 

Employee PRSI contributions totaling €48 million in January plummeted to just €8 million in April, with employer PRSI contributions dropping from €131 million in January to €24 million over the same period. 

The sectors with greatest share of workers receiving the TWSS subsidy are Of workers receiving the government earnings subsidy, 23.9% are in the wholesale and retail trade (23.9%), manufacturing (14.5%), construction (10.6%)  and accommodation and food services (9.9%). 

Between them, Dublin City and County accounted for 42.9% of employees and 32.1% of employers covered by the TWSS.

The 12-week TWSS was launched on the 26th March to assist employers whose businesses had been hit by the Covid-19 crisis, by allowing them to maintain a link with their workers, rather than laying them off.

It was felt that this would make it easier to re-start businesses as the economy re-opened.

It is expected that the government will extend the scheme beyond its original termination date of 18 June, but it is as yet unclear whether its terms will be amended, and if so, to what extent.

In the initial phase from 26 March, eligible employers were reimbursed a maximum subsidy of €410 in respect of each eligible employee, regardless of the employee’s income. From May 5 onwards, TWSS is based on each eligible employee’s average net weekly pay for January and February 2020, calculated from the payroll submissions made (to Revenue) by the employer for that period.

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Grocery sales rise at fastest rate in 15 years

Take-home grocery sales experienced the fastest rate of growth in 15 years over the past 12 weeks, jumping by a quarter, according to new data from Kantar.

But the boost in take-home purchases was offset somewhat by reduced outlays by consumers on on-the-go meals, drinks and snacks.

“The jump in grocery sales over the most recent three-months in large part reflects the fact that it includes both the pre-lockdown surge in shopper spend and the eight weeks of stay-at-home advice from Government, bringing almost all meals into the home,” said Emer Healy, retail analyst at Kantar.

“While the growth of take-home grocery sales is strong, the overall picture for some supermarkets will be less positive as these gains are offset by falling spend on on-the-go meals, drinks and snacks.”

Online sales of groceries also leapt, rising 76% compared to the same period a year ago.

“Demand for online groceries has soared over the past few months and 15% of Irish households received at least one online delivery over the latest 12 weeks – a significant increase from 9% last year,” said Emer Healy.

“This sudden surge in demand meant that the retailers had to act quickly to increase their online capacity, and have been rightly praised for extending their services to those who need them most.”

“That includes reaching groups who are more vulnerable in the current crisis, with an additional 26,000 retired households ordering an online delivery over the 12 weeks to 17 May and over 65s spending an extra €8.9 million online.” 

With sunny weather dominating over the period and the pubs still shut, sales of alcohol spiked over the month to May 17, jumping 93%.

An additional €3.8 million was spent on sausages and burgers, as consumers fired up their barbecues, while ice cream sales were worth an extra €5.9 million during the period.

Other product categories which experienced large sales increases include haircare products and hair colourants which were up 25% and 73% respectively as people were forced to look after their hair from home.

On the Friday before the May bank holiday weekend began alone, overall sales reached €52.8m.

Patterns of consumer behaviour driven by the Covid-19 restrictions are now apparent in the data, according to Kantar.

“As lockdown continues, households with more mouths to feed at home have made their way through supplies and are now starting to top up depleted store cupboards,” said Ms Healy.

“In accordance with Government guidelines, we’ve seen shoppers limiting their time spent out of home by making fewer, larger trips at local stores, visiting grocers two fewer times over the past 12 weeks than they did in this period last year.  Families with children under 16 pushed up their spend by 30% on average.”  

SuperValu has benefited the most from the boom in sales, claiming the title for the fastest growing retailer over the period as a result of a 32.7% increase in sales and grabbing the largest share of the market overall.

It was followed by Tesco, where sales grew by 23.7% over the month, to leave it with 21.8% of the market.

Overall grocery inflation stood at 2.3% at the end of the three months ending May 17.

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72% drop in new car registrations in May due to Covid-19 outbreak

New car registrations for last month dropped 72.3% when compared to May 2019, according to the latest figures from the Society of the Irish Motor Industry. 

1,751 new cars were registered last month, compared to 6,320 in May 2019.

The figures reveal that Covid-19 has heavily impacted on sales, with retailer’s showrooms remaining closed until the 18th of May due to the restrictions.

Registrations year to date are down 34.6% on the same period last year. 

The commercial vehicle sector has also been impacted.

Light commercial vehicles are down 70% compared to May last year, while HGV registrations are down 69.8%.

Commenting on the market figures, Brian Cooke, SIMI Director General, acknowledged that there will be a “very challenging” period ahead for the Industry.

“Our Industry is grateful to be open for business again. SIMI members continue to implement social distancing and sanitisation measures, in accordance with both Industry and State guidelines, that will protect both their employees and customers against the spread of COVID-19,” he said.

Mr Cook called on the Government to support the industry over the coming weeks and months. 

“In the short term the State should expedite the safe re-opening of NCT, while also re-instate the Government Grants for Company Electric Vehicle purchases. The key July registration period is fast approaching, and the Motor Industry has commenced promotional activity with a variety of attractive new car offers already announced in order to optimise sales,” he added. 

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AIB PMI shows manufacturing downturn continues in May due to Covid-19

Irish manufacturing activity suffered a further severe deterioration last month, according to figures published today.

The AIB Manufacturing Purchasing Managers’ Index (PMI) for May shows that although many indicators recovered some of the ground lost in April’s collapse, they still signalled rapid falls.

The PMI rose from April’s 11-year low of 36.0 to 39.2 in May.

The latest figure represented a slower month-on month overall deterioration in operating conditions than in April, the first full month of Covid-19 lockdown, but still a rapid contraction nonetheless.

The May figure was the eighth lowest on record, falling far short of March’s 45.1.

The output and new orders components both registered higher figures in May but still indicated stronger declines than in any survey period prior to April, dating back to May 1998.

“The AIB Irish Manufacturing PMI data for May paint a downbeat picture of the sector for the third month in a row as the lockdowns associated with the coronavirus pandemic continue to depress activity. At least the headline index managed to rise to 39.2 from 36.0 in April. It is also the case that the index fell to even lower levels in the 2008-09 recession, when it troughed at 33.2,” AIB’s Chief Economist Oliver Mangan said in a statement.

“Manufacturing output remained weak, with nearly 60% of respondents reporting lower production in May. Total new orders, including for exports, are mired at historically low levels, although their rates of decline eased. Employment in the sector continued to contract, but the pace of job shedding did slow appreciably from April,” he added.

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