Belfast Telegraph

Unemployment rises as more job woe predicted

By Symon Ross

Unemployment has risen again in Northern Ireland and worse is to come once the full extent of public sector cutbacks come to light, analysts have warned.

New figures from the Department of Enterprise Trade and Investment showed that after falling for the first time in almost two years in April, the number of people claiming unemployment benefit in the province edged up by 100 in May to 55,000.

Northern Ireland was the only one of the 12 UK regions to see an increase, with the UK as a whole recording a monthly decrease of 2%.

The wider unemployment rate - including those not eligible for benefits - rose by 6,000 to 58,000, a rate of 6.9% for the three months between February and April.

While that was better than the UK average of 7.9% and the Republic's 13.2% rate, economists cautioned that unemployment will keep rising as the coalition government implements austerity measures to restore the UK's public finances.

Ulster Bank economist Richard Ramsey said: "Further economic damage and job losses will follow as the driver of the recession switches from the private sector to the public sector. The sheer scale of the forthcoming public expenditure cuts will have a negative impact on Northern Ireland's labour market prospects both directly - on public sector pay and headcount - and indirectly (through) reduced demand in the private services sector and construction.

"We still expect the claimant count to reach 62,500 by the turn of the year and higher thereafter. It is likely to be 2012 before we see the peak in Northern Ireland unemployment."

Mr Ramsey predicted public sector employment levels will fall back to levels not seen since the start of the decade.

Northern Bank chief economist Angela McGowan said that looming financial pressure on public sector spending is already sinking in, with statistics showing the number of public sector employees in Northern Ireland fell by 1,000 between the end of 2009 and first quarter of this year.

"We would expect to see further rises in unemployment as the local public sector shrinks although the actual extent of those job losses cannot be accurately predicted," she said.

Enterprise Minister Arlene Foster acknowledged that challenges lie ahead.

"This remains a difficult time for people in Northern Ireland, as it will take some time before any economic recovery can be translated into sustained jobs growth and employment opportunities," the Minister said.

"I am also conscious that, as we await the impact of likely budget cuts at the UK level, the need to grow a vibrant private sector in Northern Ireland is more pressing than ever.

"I will therefore continue to work with the business community and all the relevant stakeholders in the Northern Ireland economy to create the conditions needed for growth."

Other figures showed that the number of employee jobs fell by 1,280, between December 2009 and March 2010. This was the smallest decline in the Northern Ireland jobs series since the start of the economic downturn.

The number of working age people classed as economically inactive fell over the quarter but at 26.7% remained well above the UK average of 21.5%.