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Unemployment rise is a cause for alarm

Editor's Viewpoint

Published 21/04/2016

Unemployment numbers are up in Northern Ireland
Unemployment numbers are up in Northern Ireland

Northern Ireland's slow emergence from the recession - economic growth here was lower than in the rest of the UK - has suffered a major blow with the announcement that unemployment has risen by 4,000 in just three months.

This leaves our unemployment rate at 6.3%, worryingly higher than the UK average of 5.1%, even though the jobless total nationally rose by 21,000 to 1.7m in the same period.

Nationally, uncertainty created by the forthcoming referendum on EU membership is being blamed for some of the increase, as employers are cautiously awaiting the outcome of the poll before making investment or employment decisions.

In the province it appears that many of the job losses are in the important manufacturing sector and the recent introduction of the living wage may also have caused some employers in the notoriously low margin hospitality sector to cut back on staff.

Whatever the reason, or combination of reasons, this increase in unemployment should ring alarm bells among the policy makers. In other parts of the UK it would be a major election issue, but here the focus during the hustings for the new Assembly remains steadfastly on the sectarian headcount and which party will be top dog in the new administration.

Yet the politicians will not be able to dodge the issue for long. The level of unemployment and the direction in which the total is going is a strong indicator of the strength of the economy and this latest jobless increase cannot simply be wished away.

The parties have pinned much of their hopes for future inward investment on lowering the corporation tax rate to something approaching that in the Republic, but there is a movement towards equalisation in other regions of the UK which could lessen the impact of the new initiative when it is introduced here.

It is evident that we require more investment in increasing the skills of our workforce. There is a shortage of developers in the lucrative IT sector and vacancies exist in the higher value professional occupations, as well as in engineering and manufacturing.

While the Executive has had undoubted success in attracting investors, there remains a challenge to provide the qualified workforce that companies, both indigenous and coming from abroad, require. We cannot compete on cost, so our emphasis must be on skills and competency.

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