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Stagnant Northern Ireland economy raises fears for long-term unemployed

By Margaret Canning

Published 12/11/2015

Danske Bank's chief economist Angela McGowan
Danske Bank's chief economist Angela McGowan

Economic inactivity has reached a six year high in Northern Ireland, prolonging a key cause for concern for the province, it's been claimed.

There are 323,000 people in Northern Ireland who are neither in work or available for work, according to the Northern Ireland Labour Force Survey.

But the survey also said the unemployment rate of 5.9% over July to September was down slightly over the year.

And the dole queue had also shortened in October, with the separate claimant count measure at 39,700, a fall of 1,000 over the month.

But the economic inactivity rate - a measure of those of working age who are not available for work due to illness, studies, retirement or because of duties in the home - was 27.7%, an increase of 0.6% on the year before.

And the rate continues the trend for Northern Ireland having the worst record of economic inactivity of the 12 UK regions, where the average is 22%.

Ulster Bank chief economist Richard Ramsey said: "The number of economically inactive hit a six-year high in the third quarter of 2015.

"The number of people neither in work or looking for work increased by 0.9% (up 6,000) in quarter three and by 2.5% (up 14,000) over the last year." And he said exterior problems in the world economy were now exerting pressure in Northern Ireland, as evidenced by recent job loss announcements at Michelin and other manufacturers.

The figures also show that the percentage of those on the dole who had been drawing unemployment benefits for more than a year - the long-term unemployed - was 60.8%, up 2% on a year before. Unemployment among 18-to-24-year-olds was down nearly 2% year on year at a rate of 18.1% - which was still considerably higher than the UK average rate of 13.3%. Danske Bank chief economist Angela McGowan (below) said the figures presented a "mixed picture" of the labour market.

"The number of monthly claimants is continuing to fall, which is great, but if we scratch below the headline indicators it is clear that Northern Ireland is still struggling to create enough new jobs and has a very serious long-term unemployment problem."

She added: "The long-term unemployed are one of the most vulnerable groups in the labour market, as it is associated with increased poverty and social exclusion."

And at nearly 61%, long-term unemployment was as severe here as in troubled EU countries such as Portugal and Greece, the economist said. "This is an area that clearly needs targeted resources," Ms McGowan said.

PwC chief economist Esmond Birnie agreed the picture was "mixed," and said PwC forecast "modest" growth of 1.6% this year, compared to over 2% in 2014.

"There is no evidence that the region is closing the prosperity gap with the rest of the UK and Northern Ireland will in fact be the slowest growing of all 12 major UK regions in 2015."

Enterprise Minister Jonathan Bell said: "While I recognise it has been a difficult time, the figures do contain positive messages from key labour market indicators.

"Both the unemployment rate and the number of unemployment benefit claimants have decreased over the quarter and the year."

Belfast Telegraph

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