Belfast Telegraph

Sunday 21 September 2014

Dole queue shrinks, but long-term jobless rises

Fall of 5,000 in the numbers of economically inactive people
Fall of 5,000 in the numbers of economically inactive people

LONG-term unemployment is growing in Northern Ireland even as the overall number on the dole falls, an economist has said.

Claimants of jobseekers allowance fell by 600 to 58,700 in January, so that over the year the claimant count had fallen by 6,200, according to figures from the Northern Ireland Statistics and Research Agency (Nisra).

The separate unemployment rate for October to December 2013 was 7.4% – up 0.1 percentage points over the quarter but down 0.5 percentage points over the year.

However, the number of people who had been claiming the dole for over one year had grown from 17,365 in January 2013 to 19,560 in January 2014 – the highest since July 1999, according to Ulster Bank chief economist Richard Ramsey.

He said the overall fall in the claimant count was to be welcomed, but added: "On the one hand it's positive, but some of the underlying dynamics within that are concerning.

"Many of those who have been unemployed have quickly found work and have the skills and are well-enough qualified to do so. They are the short-term unemployed.

"But an increasing number of unemployed people are not able to get work at all."

And analysing unemployment by age showed that youth unemployment was 23.2% while the rate among 25 to 49-year-olds was 5.6%. "We are not all in this together," Mr Ramsey said.

There was a fall of 5,000 in the numbers of economically inactive people between October to December, leaving Northern Ireland with a working age inactivity rate of 26.9% – still the highest of all 12 UK regions.

Paul MacFlynn, economist at the think-tank the Neri Institute, said January's small increase in the unemployment rate "may spell the end of the downward shift in unemployment" since mid-2013.

"The claimant count has been on a pretty consistent downturn trajectory, but if the rate of decrease in unemployment is beginning to slow, I would expect a time lag before this shows up in the claimant count," he said.

"Not all those who can claim benefit do, and some unemployed are not entitled to it."

He said rates of economic inactivity continued to differ in the UK and Ireland – but not always for the reasons people assumed.

"The student population of Northern Ireland is significantly bigger. Students as a percentage of workforce (16-64) in the UK account for 2.9%, here it's 6.7%," he said. "By comparison long-term sick represent 3.6% of the workforce in UK and 6% here."

Danske Bank chief economist Angela McGowan said the figures showed there was still "a fair degree of slack" in the economy and said the unemployment rate may not slow down in 2014 at quite the same rate as last year.

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