Northern Ireland’s labour market has solidified its strength in the latest data release with the number of people in work climbing to pre-pandemic levels.
The Northern Ireland Statistics and Research Agency (NISRA) said that the employment rate hit 74.2% in the three months to April, the same as that recorded prior to the Covid-19 pandemic in the last quarter of 2019.
The jobs market continues to defy expectations, shrugging off wider economic jitters triggered by rising interest rates and strong inflation. As well as strong employment rate reading, the unemployment rate has stood around 2.4% for the last few months, again the same level as before the pandemic.
While the NISRA report suggests employers are still confident, there is also the chance the figures may be reflecting economic health in past, as employment statistics are often described as a lagging indicator of economic health.
Richard Ramsey, Chief Economist at Ulster Bank in Northern Ireland, said the data is positive, but a deeper dive into the detail shows some signs of weakening.
“Overall, NISRA’s latest batch of local labour market statistics are encouraging and point to a robust labour market,” he said. “Near record low unemployment and plenty of employment opportunities.
“Granted there are some signs that labour demand is softening – For example, HMRC payrolls have fallen in each of the last two months and there were 610 proposed redundancies in May – the highest number in almost two years. Notwithstanding long-term issues such as low productivity, the overall picture of the local labour market is something policymakers would have dreamt about.”
However, he warned the twin headwinds of continued high inflation and rising interests lie in wait.
“Near record low unemployment is little comfort in a cost-of-living crisis,” he said. “Households would like their energy and food costs and their purchasing power go back to pre-pandemic levels, but this is probably a vain hope.
“Given that the UK labour market is not weakening sufficiently for the Bank of England’s liking (unemployment rate is falling and wage growth is still accelerating), further interest rate rises are inevitable.”
