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'Stubbornly high' economic inactivity rate mars low unemployment levels

The north's unemployment rate remains one of lowest on record
Gareth McKeown

THE north's unemployment rate remains one of lowest on record, but economic inactivity remains "stubbornly high", the latest figures show.

The Labour Force Survey for the period February to April has revealed a slight rise in those unemployed to 3.3 per cent, an increase of 0.2 per cent over the quarter, but 2.1 per cent less than a year ago (5.4 per cent). In spite of the hike over the quarter the Northern Ireland unemployment rate is the third lowest on record, the joint lowest of all UK regions and below the UK average (4.2 per cent) as well as the level in the Republic (6.1 per cent).

The figures show a slight decrease in the employment rate of 0.2 per cent over the quarter, with the proportion of those in work now sitting at 69.7 per cent. This is 0.7 per cent more than the same time a year ago, but the lowest of the UK regions and below the average of 75.6 per cent.

The number of employee jobs jumped over the quarter by over 6,000 to an all-time high of 763,440, with the private sector driving the increase, recording a 1 per cent rise over the quarter and 3.4 per cent over the year to a record 557,130 jobs.

The economic inactivity rate remains unchanged though over the quarter at a UK high level of 27.9 per cent, 0.7 per cent higher than a year ago and well above the overall average (21 per cent). In contrast the UK reported the joint lowest inactivity rates on record.

FSB Northern Ireland policy chair, Tina McKenzie believes the "stubbornly high" level of economic inactivity is a major cause for concern.

“There is a huge chasm between the rate of economic inactivity in Northern Ireland at 28 percent compared to the overall UK rate at 21 percent. If this is not addressed it will cause significant issues for businesses who require access to skills and labour, and will also have wider social implications," she said.

Ulster Bank chief economist, Richard Ramsey said it was important not to get carried away with the increase in Northern Ireland jobs.

"Job quality matters more than quantity. Northern Ireland's jobs machine may be working well but the productivity machine continues to misfire," he said.

"Northern Ireland's primary labour market challenge is improving productivity. Those who are classed as economically inactive (excluding students) are the least productive of all. Reducing inactivity and increasing productivity (through skills, innovation, investment, competition and enterprise) have been and will continue to be the focus in the local economy for the next decade and beyond."

Last month the number of people claiming unemployment benefits fell by 100 to 28,900, representing 3.1 per cent of the workforce.

There were 189 confirmed redundancies in May, while there was a decrease of 14 per cent in the number of confirmed redundancies (2,163) over the year to May 31.

Approximately one third of the redundancies were reported in the manufacturing sector.

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