Irish Q2 unemployment rises to highest in 9 years

By Andras Gergely

DUBLIN (Reuters) - Ireland's unemployment rate rose in the second quarter to a near 9-year high as a weakening construction sector added to dole queues, while separate figures on Wednesday indicated a further slide in the property market.

The seasonally adjusted unemployment rate rose to 5.1 percent in the second quarter from 4.8 percent in the first, the Central Statistics Office (CSO) said in its Quarterly National Household Survey.

The last time the quarterly unemployment rate reached 5.1 percent was in the final quarter of 1999, the CSO said.

The number of people in employment rose at an annual rate of 0.3 percent in the second quarter, down from growth of 2.6 percent in the previous three months and 4 percent a year earlier.

After an end to Ireland's decade-long property boom when house prices quadrupled, falling house prices and a global economic downturn have abruptly ended Ireland's "Celtic Tiger" boom.

The economy is expected to contract in 2008 after growth of 6 percent in 2007, a Reuters poll showed last month, with unemployment seen reaching 6.2 percent at the end of the year and adding a further percentage point by late 2009.

Bloxham analyst Jason Somerville said the alarming falls in construction sector employment were likely to be followed by more job cuts, adding that economic conditions had worsened since the March-May period which the CSO survey covered.

"Given the further deterioration in the construction industry in recent months it is likely that the third and fourth employment surveys will be a lot weaker than Q2's," Somerville said in a research note.