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Furlough scheme keeping NI jobless rate 'artificially low'

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Thousands have lost jobs in the coronavirus pandemic.

Thousands have lost jobs in the coronavirus pandemic.

PA

Thousands have lost jobs in the coronavirus pandemic.

Northern Ireland’s jobless rate of 3.6% is “artificially low” as the furlough scheme continues to support jobs, an economist has said.

At 3.6%, Northern Ireland had the lowest unemployment rate of 12 UK regions between October and December, according to the labour market report.

But the figures from the NI Statistics and Research Agency also show a fall in the employment rate over the year of 3 percentage points to 69.4%.

The unemployment rate, meanwhile, had climbed 1.2 percentage points over the year.

Mark Magill, a senior economist at the Ulster University economic policy centre, tweeted that it marked the first time that the employment rate here had fallen below 70% for two years.

And the continued operation of the Coronavirus Job Retention Scheme was also disguising the true number of unemployed.

At the end of December, there were 94,8000 people here on the scheme, through which the government maintains jobs even where there is no work for employees to do, by paying up to 80% of an employee’s wages.

Mr Magill tweeted: “At 3.6% unemployment in NI remains the lowest amongst UK Government office regions. Artificially low due to furlough, but important reminder that we started the crisis from a strong position.”

Chancellor of the Exchequer Rishi Sunak is due to give an update on the furlough scheme in his Budget next Wednesday. Furlough is to expire at the end of April but there is speculation it could be extended until at least May.

The labour market report also shows that NI remains lumbered with the highest rate of economic inactivity of the UK regions.

At 28%, economic inactivity had risen by 2.1 percentage points over the year.

It is a measure covering those who are neither in work nor looking for work due to circumstances such as retirement, study or duties in the home.

Mr Magill said that the “recent trends are unfortunately widening NI’s underperformance gap... with the UK.”

The year-on-year changes in the economic inactivity rate and the unemployment rate were “significant”, Nisra said.

At 56,700, the claimant count of people claiming jobless benefits last month almost double the level of January 2020.

However, there had been eight monthly falls in a row for the claimant count since a peak of 65,200 in May when the impact of the Covid-19 spring lockdown was most sharply felt.

And experimental figures from HMRC showed that there were 742,900 payrolled employees in NI in December, down 0.9% on the same month a year earlier.

Median monthly pay was £1,789, which was up 6.9%, or £116, on the same period a year earlier.

Over the last year, there have been 5,150 confirmed redundancies, up nearly 70% on the year before and the highest since 2004.

And proposed redundancies have hit 10,640 - more than double the 4,410 of the year before.

However, companies only have to notify the government of redundancies where they are making 20 or more people redundant - so the true picture for redundancies may be more severe.

Belfast Telegraph


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