The number of Northern Ireland unemployed will push higher and unemployment is not expected to peak until 2012.
The rise in unemployment will be down to:
- More job losses and the lack of alternative job opportunities.
- Northern Ireland not generating the employment opportunities to absorb those annual school leavers.
- Graduates hoping to enter the jobs market and a shift from economic inactivity to unemployment.
An increasing proportion of our young people will face the stark choice of either joining the dole or leaving Northern Ireland in search of employment opportunities elsewhere.
Rising youth unemployment, graduate unemployment and graduate under-employment will become more evident in the labour market over the next 18 months.
In terms of public expenditure cuts, it should be remembered that all the talk to date, including my estimates of £1.5bn of cuts over the next four years, is just referring to the Executive's budget.
In turn, these measures will reduce consumer spending on goods and services in Northern Ireland and will act as a major drag on future economic growth.
Richard Ramsey is the Ulster Bank’s chief economist