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NI firms rack up 9,000 job cuts in past year as Covid wrecks economy

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Northern Ireland's unemployment rate has soared.

Northern Ireland's unemployment rate has soared.

Richard Ramsey

Richard Ramsey

Northern Ireland's unemployment rate has soared.

Redundancies have more than doubled in Northern Ireland over the last year to hit 9,000 as coronavirus and lockdown take their toll on the economy.

And steeper job losses are anticipated when the Government's Coronavirus Job Retention Scheme - which in June was paying the wages of 240,200 people here - is wound down at the end of October.

In July last year, there had been 90 proposed redundancies - a fraction compared to the 1,904 potential redundancies announced last month.

Since lockdown, thousands of people have faced redundancy in sectors including aerospace, hospitality and retail - with department store giant Debenhams the latest to announce another round of job cuts.

Economic inactivity - where people are neither in work nor looking for work - is also increasing, with the female rate of 31.2% up by 1.9 percentage points over the year, while the male rate fell slightly.

Ulster Bank chief economist Richard Ramsey said young people are being disproportionately affected by job losses. Yesterday's labour market report from the NI Statistics and Research Agency (Nisra) showed that there were 7,000 fewer 16 to 24-year-olds in work in the second quarter, compared to earlier in the year.

And over the last year, 3,112 redundancies have been confirmed - an increase of nearly 75% on the previous 12 months.

The number of proposed redundancies, at 9,000, is significantly higher due to the spike of redundancy announcements over the last few months.

There is also a time lag of up to 90 days between when redundancies are proposed and when they are confirmed.

During July, 610 redundancies took place.

Over the last few months, aerospace firms in Northern Ireland including Bombardier Aerospace, Thompson Aero and Collins Aerospace have announced they are making over 2,000 people redundant as the sector has been badly hit by lockdown.

The latest labour market survey said there had been 1,904 redundancies proposed by firms during July - following nearly 2,500 in June.

And the claimant count - the numbers of those claiming jobseekers' benefits - has continued to climb beyond levels last seen in 2012 and 2013.

Another 500 people joined the claimant count in July, bringing the measure to 62,900 or 6.8% of the workforce. Mr Ramsey said that under-35s accounted for 55% of the rise in claimants between March and July.

July was the third month in a row that the claimant count reached beyond 60,000.

Mr Ramsey said the continued shelter provided by the Coronavirus Job Retention Scheme - in which the Government protected jobs which would have otherwise been lost - had formed a "statistical fog," making it hard to see clearly the extent of the impact on the jobs market of Covid-19.

Between the CJRS and the Self-Employment Income Support Scheme, he said that the Government was supporting over 316,000 workers in Northern Ireland - around 37% of total employment.

Mr Ramsey said: "Only after the CJRS has ended will we get a much clearer view of the true state of the labour market. Needless to say there will be a significant rise in unemployment and fall in employment."

And he said the scheme's protection of jobs meant that the unemployment rate remained low at 2.5%.

However, he said lockdown contributed to a significant fall in average weekly hours by a full-time worker from 37.8 hours in the first quarter to 31.4 hours in the second quarter.

Economic inactivity was also up, with an extra 8,000 people neither in work nor looking for work between the first and second quarters.

Belfast Telegraph