Unemployment in the Isle of Man rose by 1.7 per cent last month.

An increase in redundancies and layoffs, at the same time as falls in new vacancies, left 721 people without work as 2009 began.

Figures show that while there are still labour shortages in areas such as domestic services and health care, the opportunities for construction workers and those in the retail sector have reduced significantly in recent months.

Treasury Minister Allan Bell (pictured) says the latest figures are no surprise, but need to be put in context.

He told Manx Radio:

"We have to recognise that the unemployment level within construction does creep up over the Christmas/New Year period because a lot of sites do close down during that period.

"But undoubtedly, there is an upward trend in unemployment in construction as the industry generally does slow down, and the problems of the retail industry have been well documented over these past few weeks.

"We will see further evidence of that working its way through into the unemployment figures in the next month or two, because these figures that we are releasing today, by and large, do not include, for eample, those unfortunate people who have been made unemployed by Woolworths."