Fortunes of Northern Ireland workers remain dependant on Brexit outcome

Northern Ireland’s labour market enjoyed a strong end of 2018, but the continued political uncertainty and delays caused by Brexit remain a key concern for its future, according to PwC NI.

According to the most recent Labour Force Survey, unemployment rates in Northern Ireland fell in the last quarter of the year and, at 3.4%, are below the UK average (4 percent). They are also lower than the Republic of Ireland (5.3%) and the European Union (6.7%).

Employment rates increased over both the quarter (0.4 per cent) and also year-on-year (0.6%) figures, a particularly significant statistic as redundancies in 2018 (2,498) increased by 40% compared to 2017 (1,790).

However there was also an increase in the economically inactive rate (27.9 per cent), up 0.4 per cent in the quarter and 0.3 per cent over the year, continuing Northern Ireland’s trend of having the highest inactivity rate across the UK.

Mike Jakeman, senior economist at PwC, comments on the latest labour market data:

"Although the UK economy is widely believed to be slowing, as businesses hold back on investment until they receive more clarity on Brexit, the labour market continues to go from strength to strength.

"The data for November shows further improvements in all areas: unemployment fell by a tenth of a percentage point to 4%, the employment rate rose by the same amount to an all-time high of 75.8%, while nominal wage growth continued to accelerate, reaching 3.3% year on year. In real terms, wage growth picked up to 1.1%, the strongest rate for two years. These are all positive developments.

"As with every other aspect of the economy, the outlook for the labour market remains highly dependent on Brexit. Should a deal be struck within parliament and a reasonably smooth process occurs in 2019, conditions should improve further for workers, with businesses committing to investment plans that had been put on ice. This would spur demand for more labour, which, given the record high employment rate, would put further upward pressure on wages. However, a range of other less positive outcomes are possible if the UK leaves the EU without a deal and the economy receives a negative shock.”

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