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Unemployment in Northern Ireland to worsen, warns economist


Redundancies in Northern Ireland hit their highest level in a decade during 2020 as the Covid-19 pandemic took its toll on business activity.

Of last year's 11,000 lay-offs, all but 500 were announced after March when the first lockdown in response to the virus was introduced.

However, the labour market report from the NI Statistics & Research Agency (Nisra) shows some improvements.

There was a sharp drop in proposed redundancies in December, down from 1,370 in November to 340.

But the 11,000 proposed across the year was more than double 2019's tally.

The unemployment rate also dropped over the quarter by 0.5 percentage points to hit 3.2% for September to November.

And the claimant count for benefits in December was 58,400, down 1.3% from November's revised figure, and 9.1% below a peak in May.

Ulster Bank chief economist Richard Ramsey said it was "premature" to talk of a recovery.

"The Chancellor recently stated that the economy is going to get worse before it gets better. Similarly, the labour market will deteriorate before a sustainable recovery takes hold.

"Unprecedented employment support measures such as the Job Retention Scheme (JRS) and the Self-Employment Income Support Scheme (SEISS) largely inoculated the UK and NI economies against a severe labour market shock.

"But once these measures are withdrawn a surge in unemployment in the second half of the year is inevitable."

According to the most recent figures, JRS was supporting 68,000 jobs here at the end of October. But a number of those are expected to be lost if the scheme is closed at the end of March as expected.

By the end of October, 81,000 people here had made claims for grant support under SEISS.

And while the local unemployment rate was falling - and was much lower than the UK's 5% - Mr Ramsey said economic inactivity was moving in the opposite direction.

The rate of economic inactivity here - a measure of those neither in work nor looking for work - is 27%, 1.4 percentage points above the pre-pandemic rate of 25.6%.

Belfast Telegraph