Private sector jobs hit all-time high – but output still struggles to recover

Northern Ireland’s private sector employment has hit an all-time high, according to the latest labour market data from the Northern Ireland Statistics and Research Agency (NISRA). In the three months to September 2017, there were 752,040 employees in employment in the local private sector, an increase of 11,200 on the same period in 2016.


Commenting on the latest data PwC Northern Ireland partner Dr David Armstrong said the NISRA data contained some mixed messages:


“The good news is that claimant count unemployment continues to fall – down 300 to 29,000 in November, while the total number of employee jobs increased by 2,460 between June and September.


“Manufacturing increased its headcount by around 1,500 in the year to September 2017 and now employs 84,100 people. Over the same period employment in services grew by 1,780 to an impressive 612,460. However the rest of the private sector, including construction, saw employment decline.


“Less welcome are the output data. Services’ output still around 5% below its 2006 peak, while Production output actually fell by 6.5% over the past year. Over the same period, overall UK production output grew by 1.8%.


“In addition, the region’s economic inactivity rate (the percentage of people aged 16 - 64 not working, not seeking work or available to work) now totals 240,000 (29%) - the highest since 2009. That’s a 32,000 increase over the past year a jump of 14,000 in the three months to September 2017. Almost a third (29%) of the total are people on long-term sick.


“Overall, this is another reminder that employment data alone are not a proxy for productivity, output and wealth creation.”


On the wider UK data, PwC says the UK-wide labour market data provide a further indication that the great jobs boom of recent years may be running out of steam. Employment in the three months to October was down 56,000 on the previous three months, although still more than 300,000 higher than a year earlier.


PwC chief economist John Hawksworth, said that the decline in employment was not simply due to rising unemployment, but, as in Northern Ireland, it represented a rise in economic inactivity:


“In the three months to October, the UK unemployment rate remained at 4.3%, the joint lowest since 1975, however more people are becoming economically inactive and dropping out of the labour market altogether rather than actively looking for work.


"Average earnings growth picked up to 2.5%, although this was largely due to higher bonuses, which tend to be erratic. Regular pay growth, which is a better indicator of underlying trends, only edged up slightly to 2.3% and remains well below the latest consumer price inflation rate of 3.1%.


“Real pay levels continue to be squeezed, and we expect this to persist for at least the first half of 2018, further dampening consumer spending growth."



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John Compton
Corporate Affairs, Northern Ireland and Deputy Head of UK Media Relations, PwC United Kingdom
Tel: +44(0)7799 346 925

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