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Employment at record high but economic output is 'critically low'

By Margaret Canning

Published 16/06/2016

Economist: Dr Esmond Birnie
Economist: Dr Esmond Birnie

Northern Ireland's economic output remains "critically low" despite record employment levels, an economist has said.

New figures have shown employment is at a record high in the province, with the job market in its best shape since the economic downturn.

The Labour Force Survey also said economic inactivity was the lowest since the series began.

Northern Ireland's unemployment rate is now 5.8%, down 0.4 percentage points over the year - compared with a UK-wide jobless rate of 5%.

And the Northern Ireland Statistics and Research Agency's (Nisra) separate figure for those claiming unemployment related benefits decreased by 600 in May to 37,200.

The employment rate was 69.6% - a record high - while economic inactivity was 26%.

PwC NI chief economist Dr Esmond Birnie said there were 11,930 jobs created in the year to March, an increase of 1.6%, year-on-year. Most of the extra jobs came from services - a category which covers everything from restaurants to estate agents - with jobs expanding by 8,580 year-on-year.

But Dr Birnie said that while the jobs growth was impressive, it was not being matched by wealth creation. He said: "Whilst total employment is back to the 2008 level, total output in the local economy remains about 7% down on the previous peak, suggesting that there has been a major reduction in productivity/output per person.

"This is in contrast to the rest of the UK, where GDP has grown and productivity levels have remained roughly static.

"Whilst Nisra's figures show a continued improvement in terms of increasing Northern Ireland's employment rate and decreasing economic inactivity, the failure to improve productivity levels remains a critical weakness."

Ulster Bank chief economist Richard Ramsey said the quarterly employment survey showed there were 735,010 employees in the first quarter of the year. "Northern Ireland has now passed the significant milestone of recovering all of the 41,170 jobs lost during the period from quarter two in 2008 to quarter four in 2011."

Danske Bank chief economist Angela McGowan said Northern Ireland still needed to raise productivity levels, as well as address skills and educational underachievement.

Belfast Telegraph

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