Belfast Telegraph

Rise in people in Northern Ireland not in work or seeking work 'warning for economy'

By John Mulgrew

A rise in the number of people not working or seeking jobs in Northern Ireland is a "warning sign" for the economy here, according to one expert. The economic inactivity rate increased by 0.8% to 27.2% over the last quarter from February to April, according to the labour force survey.

The survey also revealed a fall in the employment rate, falling to 68.8%, down 0.5%.

But the separate claimant count for May revealed a fall of 300 to 31,200 in the numbers of people claiming jobseeker's allowance.

May was the 14th month in a row in which there was a fall in the number of people claiming unemployment benefits in Northern Ireland.

But according to Dr Esmond Birnie of Ulster University, the latest figures show "further signs of a slowdown in the economy".

"Economic inactivity, those not in work and not seeking work, has risen again, to 27.2%.

"In contrast, the UK average rate is 21.5%. In fact, the employment rate (the proportion of the working age population in employment), which was a key target for the previous Stormont Executive, continues to drift down.

"A further warning sign relates to the total number of employee jobs.

"This actually declined between December 2016 and March 2017 by 600 to 745,580; weakness in the service and public sectors being the main explanations."

Dr Birnie added: "Admittedly, there was still a 1.3% jobs growth in the year to March 2017 but the poor performance in the first quarter may be the shape of things to come."

Northern Ireland's unemployment rate now stands at 5.4%, and continues to be significantly higher than the UK average of 4.6%.

Danske Bank economist Conor Lambe said: "The latest Northern Ireland labour market data did contain some encouraging news as it indicated that the unemployment rate fell, both over the quarter and over the year, to 5.4% during February to April 2017."

And while he said the data did "contain some encouraging news" it is "not all plain sailing for the Northern Ireland labour market as the employment rate decreased over the quarter and the year".

"Economic inactivity also remains very much in the spotlight, particularly as the data indicated that the quarterly rise in the inactivity rate was the biggest since 2009," he said.

"More people becoming economically inactive suggests that the local labour market continues to face some challenges."

Job numbers in the private sector are now at the highest level since the survey began reporting, and are 6% higher than the number of jobs recorded at the pre-downturn peak in the third quarter of 2009.

But, public sector jobs now stand at 10% below the series peak in quarter two, 2008.

Mr Lambe added: "Turning to the national data, over the period to February to April 2017, real regular earnings for employees in Great Britain declined by 0.6%.

"While salaries are increasing in cash terms, prices are rising at a faster rate.

"This is the latest in a series of economic data that shows that the consumer is being squeezed. A similar picture is likely being reflected in Northern Ireland.

"If inflation moves up even further, then real earnings growth is likely to come under increasing pressure and households will feel an even greater pinch."

Belfast Telegraph