Unemployment and wage data deliver mixed messages on recovery and reward

In the first three months of 2017, Northern Ireland’s unemployment total remained unchanged, but the number of people in work fell and economic inactivity increased.

That’s according to the latest data from today’s Labour Market report from the NI Statistics and Research Agency (NISRA).

The Labour Market Survey measure of unemployment showed unemployment in the first quarter of 2017 remained unchanged at 5.3%. Although that was unchanged on the previous quarter it reflected a continued steady fall of 0.8% over the year.

However, the overall number of employees in employment declined, with the employment rate down by 1.5%, the largest quarterly decrease in the NI employment rate since January - March 2009. In addition, NISRA reported the largest quarterly increase in the economic inactivity rate since the quarterly series began - rising to 27.7% in the quarter, a substantial increase on the relatively low rate of 26.1% reported in the final three months of 2016.


PwC Northern Ireland partner Dr David Armstrong said the pace of recovery appeared to be slowing:


“While unemployment continued to fall a decline in employment and that rise in economic inactivity, further suggest that the recovery is slowing.


“In the first three months of 2017, total employment in Northern Ireland was around 824,000 - a fall of around 21,000 over the quarter and a decrease of 14,000 over the previous 12 months. NISRA data suggest that represents the largest quarterly decrease in the NI employment rate since the first Quarter of 2009.


“Northern Ireland’s employment rate of 68.4% remains well below the UK average of 74.8% and is the lowest among the twelve UK regions.”


In contrast, overall UK-wide employment growth appears to be picking up again after a slowdown in the second half of 2016. The numbers in employment were up by over 120,000 in the first quarter of 2017 - the biggest quarterly increase since the EU referendum.

Construction and private services are the main sectors generating jobs in the UK. However, employment growth appears to be flat in manufacturing and the public sector.

In response to the wider UK labour market figures, Andrew Sentance, senior economic adviser at PwC, said that the increase in the vacancy rate points to a pick-up in the demand for labour, with the number of unfilled vacancies across the UK at its highest level since the current data series started in 2001.


"Demand for labour may be up, but the figures on wage growth are less welcome. The annual rate of increase in total pay remains fairly steady at just under 2.5%. But pay increases have been quite dependent on bonuses in recent months.


“The rate of regular pay growth has eased back from 2.7% last autumn to 2.1 percent according to the latest figures. And whether we look at total pay or regular pay, neither measure of wage growth is keeping pace with inflation - which is now 2.7 percent.


"These latest figures therefore contain mixed news for future UK economic prospects. The pick-up in employment growth is encouraging. But the fact that wage growth is not keeping up with price inflation does not bode well for consumer spending - which has been a key factor contributing to UK economic growth in recent years."



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John Compton
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