Unemployment down, but other factors influencing Northern Ireland’s economic performance

Northern Ireland’s claimant count unemployment fell to 31,500 (3.5% of the workforce) in March 2017.

That’s a decline of 300 since February and 7,000 since March 2016, according to data from the Northern Ireland Statistics and Research Agency (NISRA). Commenting on the NISRA figures, PwC Northern Ireland partner Dr David Armstrong, said this represented an 18% fall in claimant count unemployment over the pert 12 months:

 

“We’ve seen a steady fall in the local jobless total, which has declined by 33,200 since the most recent peak in February 2013 and is now less than half the 2013 figure. However, this is just one part of a more complex picture which suggests that the overall health of the economy is about more than just unemployment numbers.

 

“The region’s claimant count unemployment has some way to go before it matches the low-point of September 2007, when 23,500 people were claiming benefits.

 

“There is also some evidence that the pace of that decline is slowing, with the rate of employment growth also showing some signs of slowing too. Overall employment in the year to December 2016 grew by 0.3% (2,490), while growth in the final three months of 2016 was 0.2%.

 

“In addition, the number of people classes as economically inactive increased by 10,000 in the three months to February 2017 and we have around 6% fewer working-age people in employment than the UK average.

 

“Finally, productivity remains well below the pre financial crash level and is showing little sign of improvement. And, with the pace of wages growth now being matched by the rate of price inflation, the high level of consumer spending that has helped support growth, may not be sustained.“

 

In response to today’s UK-wide labour market figures, Andrew Sentance, senior economic adviser at PwC, commented:

 

“Although the overall UK unemployment rate remains at its lowest level since the 1970s, this latest set of labour market data is consistent with a marked economic slowdown in recent months.

 

“Employment has risen by just 30,000 - less than 0.1% - over the past six months. This compares with a rise of nearly 300,000 over the previous six month period in the first half of 2016.

 

“Annual wage growth appears to have stabilised at 2.3%, in line with the rate of price inflation and this means that real workers’ wages are no longer rising. With inflation expected to pick up further over the course of this year, this squeeze on consumer purchasing power is likely to intensify.

 

“Both the employment and wage figures therefore point to a slowdown in consumer spending, which is already apparent from the retail sales data for the early months of this year.

 

“On this evidence, the resilient growth we saw in the second half of 2016 is unlikely to be sustained. We should expect slower growth in 2017 and 2018 as consumers rein in spending and the uncertainty around Brexit holds back investment.”

 

Ends.

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