Concerns over future remain despite latest fall in unemployment
A continued fall in Northern Ireland’s employment rate and a rise in economic inactivity highlight “deeply rooted weaknesses in the economy” which could lead to more joblessness in future, it has been claimed.
And while unemployment dropped by 5,000 people in the last quarter to a rate of 4.7%, contrasting figures paint a mixed picture for the economy here and are a “cause for concern”.
The latest official figures show a 0.3% drop in the employment rate to 68.4%, while the economic inactivity rate increased by 0.7% t0 28.1%, according to the latest Labour Force Survey. The latter is anyone neither in work, nor looking for employment.
Esmond Birnie, economist with the Ulster University’s Economic Policy Centre, said: “While the continued decline in unemployment is welcome there is no room for complacency.
“Over the last year there was a substantial jump in the rate of economic inactivity and a substantial fall in the employment rate. This illustrates deeply rooted weaknesses in the economy.”
Mr Birnie added “it is possible to have falling unemployment and rising inactivity together”.
“In the long-run, however, I think as rising inactivity indicates an uncompetitive economy and we will probably see unemployment rise too,”he said.
Ulster Bank chief economist Richard Ramsey said while “indicators suggest the economy remains in fine fettle and the labour market is in fact strengthening ... conversely, another batch of labour market statistics suggests that the economy has taken a turn for the worse”.
“While the UK and NI unemployment rates are converging, their respective employment and economic inactivity rates are diverging.
Both of these divergent trends are a cause for concern,” he added.
“Economic inactivity is on the rise. Indeed the latest three-month period witnessed the largest annual increase in economically inactive since the depths of the recession back in June-August 2009.”
But on a positive note, according to the latest figures, the NI youth unemployment rate has fallen from 13.2% to 10% over the year to June-August 2017.
Speaking about the reduction of around 500 people claiming unemployment benefits, Mr Ramsey said it “should not be viewed in isolation” as the fall “has been accompanied by an equally impressive surge in Employment Support Allowance (ESA) claimants”.
“It is noted that over the two years to July 2017, the claimant count has fallen by almost 12,700,” he said.
Belfast Telegraph Digital