The latest Labour Force Survey conducted by the National Statistics Office, and which refers to June 2002, gave the rate of unemployment at 6.9 per cent. The corresponding figure for the same month last year was 6.8 per cent. It was this piece of data that made the headlines and caught the attention of a number of persons. I can appreciate why, because the unemployment rate is always an important indication in this country of the way we are using our only resource - the human resource.

However, this indicator provides only a part of the picture as it ignores totally what is happening in the rest of the labour market.

For example, the unemployment rate could very well increase if there is a higher than usual increase in the labour supply, with a number of persons not being immediately absorbed into the employed population. In fact, something like this must have happened when one compares the data for June last year and June of this year. The labour supply increased by 1,870 persons in these 12 months. The increase in the number of persons who claimed to be unemployed (let us not forget that the data of this survey is not based on registration but on what respondents claim) was of 11,049 persons, pushing up the unemployment rate to 6.9 per cent.

The rest of the picture shows there were 1,550 more persons working in June of this year than there were in June of last year. This has meant that the activity rate (that is, the labour force as a percentage of those persons aged 15 to 54 years) has edged upwards, from 58.7 per cent in June 2001 to 59.1 per cent in June 2002.

Similarly, the employment rate (that is, the employed population as a percentage of those aged 15 to 64 years) has increased from 54.7 per cent to 55 per cent.

For an economy that is dependent on its exports of goods and services for its survival, growth and development, and having to face the violent impact of the international economic slowdown, this is no mean feat.

The largest sector providing employment remains the manufacturing sector, and rightly so as this is what provides the bulk of our export earnings. The data on the Labour Force Survey shows that this sector continued to contribute 21.4 per cent to total employment. The number of persons employed in this sector increased from 31,489 to 31,888. The survey does not give an indication as to whether this increase occurred in the exporting companies or not, but data from other sources (such as the Industry Trends Survey of the FOI) indicate that this increase in employment must have occurred with these companies given the negative perceptions of the non-exporting firms.

Looking at the other major earner of foreign exchange, that is hotels and restaurants, one does note a drop in employment, with the contribution of this sector to total employment decreasing from nine per cent to 8.8 per cent. This drop is, however, more than understandable given the drop in tourism arrivals as a result of the events of September 11.

There are other exceedingly positive indications from this Labour Force Survey. The first is the role of the private sector. In June of this year, 66.7 per cent of persons in employment were working in the private sector, compared to 66.5 per cent in June 2001. What is important here is not so much the increasing role of the private sector in providing employment (which in any case is important) but the fact that a larger part of the economic activity in this country is being taken away from public sector control, given the rigidities and total inflexibility that such control tends to bring about.

On the incomes side we have also had very positive results between June 2001 and June 2002. Average gross annual salary income per employed person stood at Lm4,696 in June last year, while the corresponding figure for June this year was Lm5,118. This is an increase of Lm422 (plus nine per cent).

Admittedly, one does have to deduct the cost of living adjustment from the one announced in last year's budget speech. However, this amounted to just Lm78. So essentially, on average, employed persons are Lm344 better off - again not a bad result given the fears that have been expressed (now proven to have been unfounded) about possible deteriorating conditions of work.

There are also very noticeable changes in the structure of the employed population. Some may regard them as positive and some may regard them as negative. Irrespective of how they are viewed, they are definitely a sign of the times and reflect the ongoing restructuring of our economy and even our society.

One such change is the gender structure. In June 2002, females made up 31.5 per cent of the labour supply and 31 per cent of the employed population. This compares to 29.9 per cent of the labour supply and 29.7 per cent of the employed population in June 2001.

This increasing role of females in the labour market reflects that the activity rate among women rose from 35.4 per cent to 37.4 per cent during these 12 months while the employment rate rose from 32.7 per cent to 34.3 per cent.

Admittedly, the drop in the male employment rate is more due to the early retirement schemes implemented in various work places such as the shipyards than to shedding of labour by the productive sectors of the economy.

These developments in employment all reflect a healthy position. It is critical that we do maintain this situation and improve upon it. Let's face it, the 12 months to June 2002 were probably some of the toughest that our economy has had to face given the international situation.

Our national economic strategy must focus on this aspect and membership of the European Union is a key element of this strategy. Membership of the EU would help us to grow employment in Malta and maintain this positive trend.

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