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UPDATE 3-Irish export growth cheers, jobless hits 12-yr high

Published 06/25/2009, 10:46 AM
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* Q1 unemployment rises to 10.2 pct from 8.1 pct in Q4

* Highest jobless rate since 1997

* April export, trade surplus jump, led by pharmaceuticals

* House prices fall 10.9 pct in May, 27th month of decline

* T-bill auction raises 2.4 bln euros, top of target range

(Adds IBM, ABB, Boston Scientific job announcements)

By Andras Gergely

DUBLIN, June 25 (Reuters) - Ireland's unemployment hit a 12-year high in the first quarter, data showed on Thursday, though growth in exports led by high-tech industries pointed to resilience in the developed world's worst performing economy.

The number of people in employment fell by 158,500, driving the jobless rate up to 10.2 percent from 8.1 percent in the fourth quarter of last year, seasonally adjusted figures showed.

That was the highest level since 1997, when the "Celtic Tiger" was in the midst of a property price-fuelled boom that saw it emerge from decades as one of Europe's poorest countries.

A report on Wednesday by the Organisation for Economic Co-Operation and Development showed Ireland's gross domestic product will fall 9.8 percent this year, the most in the 30-member club. [ID:nPAB007741]

A separate report by the International Monetary Fund said an eventual recovery from 2011 would be gradual and weighed down by tens of billions in bank losses. [ID:nN24219173]

"Despite all the hype about yesterday's very bleak economic reports on Ireland from the IMF and OECD, it is today's employment report and next Tuesday's GDP/GNP ... figures that will bring home the reality and severity of the economic downturn," said Alan McQuaid, chief economist at Bloxham Stockbrokers.

A group representing the construction industry, whose bust precipitated Ireland's sudden decline last year, said the official data underestimated the scale of the problem.

"The situation on the ground is much worse with many thousands of construction workers losing their jobs each week since the last official data was collected," the Construction Industry Federation said.

Data on Thursday showed house prices fell by 10.9 percent in May compared with a year ago, the 27th month of consecutive declines, with the survey indicating buyers still awaited signs of an economic recovery before making a move. [ID:nWLA7486]

SOFTWARE LABS, ENGINEERS

Economists took cheer however from data which showed Ireland's exports rose to a seasonally adjusted 7.8 billion euros in April from 7.3 billion in March. That produced a a trade surplus of 3.9 billion euros, up from 3.2 billion a month earlier. [ID:nLP639914]

"This is even more impressive when account is taken of the global downturn and the adverse exchange rate between the euro and both the U.S. dollar and sterling, which increases the cost of our exports to the U.S. and Britain," Minister for Trade and Commerce Billy Kelleher said.

The strong performance was largely thanks to the recession resistant pharmaceutical industry and bode well for Ireland, which is becoming more competitive in terms of wages, said Ronnie O'Toole, chief economist at National Irish Bank.

Medical device maker Boston Scientific on Wednesday announced a 91 million euro ($127 million) investment creating 45 medical technology jobs in the west of Ireland.

In another high-tech sector, IBM on Thursday unveiled up to 100 new jobs at its Irish software labs, though there was also news of 178 possible job losses at the Irish unit of Swiss engineering group ABB .

The IMF and the government agreed on Wednesday that it needed to cut spending more to control its bloated budget deficit, but there was no reason to think it would default on its debt, nor were there any talks on IMF financing for Ireland. [ID:nN24206677]

A government auction of three treasury bills on Thursday brought in the maximum targeted amount of 800 million euros ($1.1 billion) each, with moderate bid-to-cover ratios of 1.6 to 1.8, following a very successful syndicated bond sale on Tuesday [ID:nWLA7452] [ID:nLN1604]

(Additional reporting by Padraic Halpin; editing by Patrick Graham and Victoria Main)

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