According to the CSO, "employment in private firms (with five or more persons engaged) in the construction industry decreased by 0.4% in March 2007 by comparison with March 2006."

Despite this, the Construction Industry Federation (CIF) said the CSO figures "show the continued growth of employment in the construction sector". Davy issued an equally upbeat assessment, headed 'Employment growth remained strong into the early part of this year; construction sector still leads the way'. Confused?

No need to be . . . in economics what matters is the spin.

The CIF and Davy are talking about the figures for the last 12 months . . . inclusive of the boom days of 2006. Their figures come from the Quarterly National Household Survey (QNHS) for Q1 2007 released last week. The earlier figures for March came from the CSO's monthly Index of Employment in Construction published on the same day as the QNHS.

QNHS is a survey carried out each week between December and February.

This means that QNHS numbers on average, reflect the economic conditions for January.

According to Pat Mc Ardle, chief economist with Ulster Bank, "this is four months ago and predates both the high-profile manufacturing job [loss] announcements and the change in sentiment regarding housing. I expect the next QNHS survey will show a much greater deceleration in construction."

Mc Ardle is right, although this is only a part of the picture. In contrast with the QNHS, the CSO's Index of Employment in Construction is quantifying changes in March. While it is true that over the last 12 months some 28,300 new jobs were created in construction, bringing the total number of people working in the sector to over 282,100, these figures include an 11.2% increase in construction employment over 2006.

In 2006, the sector accounted for 37% of all new jobs created in the economy, and 73% of all new employment among males. However, despite all the negative talk about a 'constructionobsessed' economy, the sector should not be singled out for criticism when one looks at the underlying weaknesses across the economy.

The reason for this is simple: construction is a far less significant source of value added per unit of labour (ie labour productivity) than other sectors of the Irish economy. In the end, productivity matters more than a simple head-count of employees. And here lies the crux of the problem faced by Ireland Inc today.

Last week's QNHS (covering December 2006-February 2007) showed that overall employment in Ireland was up 3.8% year on year, down from 4.3% in Q4 2006 and 4.7% in Q1 2006. This slowdown is worrisome in and of itself, but from behind these figures even more ominous signs emerge.

The strongest growth in employment in Q1 2007 took place in health (8%), education (6.9%) and hotels and restaurants (6.2%). The first two categories of employment, although very important to the economy, are nonetheless dependent almost entirely on tax revenues. On top of this, historically both occupy the two lowest places in the overall rankings of all Irish sectors in terms of productivity levels and growth. Hotels and restaurants and construction are two sectors with the lowest labour productivity in the private economy.

On the other hand, financial and other business services . . . sectors with the highest labour productivity and thus pivotal to the economy's health . . . have shed 7,000 jobs in the first quarter.

It is becoming increasingly likely that this employment contraction is due to tighter mortgage lending (since the late 2006), slower export growth in these vital internationally-traded sectors (since 2004), and the failure of maturing SSIAs to translate into a large-scale investment boom.

On the net, the CSO figures show that Irish employment growth resembles an inverted pyramid, with a decreasing number of productive workers propping up an ever-growing army of less productive ones.

Some brokers, Ibec and the building associations are upbeat. Are you?

IRELAND TOPS EUROPE'S SUPER GROWTH INDEX.

ON a positive note, for the third year in a row Ireland ranks first in Europe as the country with the highest proportion of companies (29%, up 3% from 2006) recording the fastest growth rates.

The Super Growth Index 2007 is a part of the Grant Thornton International Business Report (IBR) which surveys more than 7,200 business owners in 32 countries, representing 81% of global GDP. The index de"nes a 'super growth' company as one that has grown considerably faster than average in performance indicators including turnover and employment.

Globally, the US tops the Super Growth Index for the third year running, with 44% of US companies in the 'super growth' category, an increase of 5% over 2006.

This year Armenia (38%) has replaced India in second position as Indian companies dropped to 14th place in the table.

Ireland (ranked globally in third place) is followed by the UK (26%, ranked fourth) and South Africa (25%, ranked fifth). Hong Kong . . . the other strong performer in 2006, when it was in third place . . . came in at number 11 in 2007.