A highly placed official of the Labour Ministry said unemployment caused by the global financial crisis was not as bad as expected with less than 40,000 job losses.

However, according to the Census and Statistics Department the Apparel industry lost 60,000 jobs during the first quarter of 2009 while the construction industry lost 36,000.

The Island Financial Review contacted the official of the Labour Ministry to find out the outcome of a fresh survey carried out by the Department of Labour on the actual number of job losses.

"The survey is still ongoing but the Ministry believes things have began to improve somewhat. We may expect to find less than 40,000 without jobs. The apparel sector has about 6,000 vacancies at present," he said.

He said ceramics and toy exports are still on the downside but the rest of the export sector was picking up.

The government is in the process of formulating an Unemployment Benefit Insurance Scheme.

"Once we gauge the extent of the exact number of job losses we will know how much we will need from the EPF/ETF to fund the scheme. The report is still being formulated and once completed we will need President Rajapaksa’s approval," our source said.

The ILO carried out a study on the effects of the global financial crisis on Sri Lanka’s labour relations, but the lack of or poor quality of official data proved to be a major impediment to the study.

Analysts warn that the ongoing survey of the Department of Labour may not be accurate, considering the methodology being used.

There are concerns that the survey may include only those who have lost their jobs due to closures, where as terminations caused by scaling down operations and certain production lines may miss the count.

"Given the dearth in information this may be the best option at our disposal and the numbers would probably be realistic," an Economist said, however.

The district labour offices of the Department of Labour figures show that 55 firms had closed down since September 2008 to March 2009, as quoted by the ILO study.

According to reports from 11 districts, over 18,000 people had lost their jobs.

Last May, The Commissioner General of Labour, M. J. L. U. Wijeweera said 32,000 jobs have been lost due to the effects of the global financial crisis, but the unofficial figure could be 70,000.

"The official figure is 32,000 but unions tell us that 70,000 people have lost their jobs due to the global financial crisis," Wijeweera said.

Opposition law makers said the number unemployed could exceed 300,000, but their methodologies are not trusted.