Covid 'may mean lost decade for jobs market' says UU
MORE than 100,000 employees who were furloughed in the north are now back working, an economic paper has revealed.
But it will take four to five years to reach pre-Covid levels of economic activity - and it could take at least a decade before unemployment falls to previous lows and there is anything remotely like a full recovery.
The Ulster University Economic Policy Centre (UUEPC) research focused on a timeline for a return to economic normality.
“Although this current economic contraction is much more severe than the recession following the financial crisis, the period of recovery is likely to be shorter," UUEPC director Gareth Hetherington said.
“Back then, the economy took seven years to recover its lost economic output.
“But it will probably take four to five years this time around, primarily because of the much shorter contraction period and the recovery phase beginning much more quickly.”
The sectors most impacted by the current pandemic are retail, accommodation (hospitality) and arts & entertainment, which collectively employed 220,000 people (nearly a quarter of all jobs) prior to lockdown.
“These sectors have been slow to see restrictions lifted and are also most susceptible to any future lockdowns, and a key challenge for government is to minimise the number of job losses here," Mr Hetherington added.
“These sectors also tend to employ a lower age demographic and people with lower levels of qualifications, and consequently could find it more challenging to move into other higher skilled employment.”
On a return to work for those on furlough, he added: “In total, 240,000 people in Northern Ireland were placed on the job retention scheme, but if the local labour market is broadly consistent with the UK trend, it's likely around half of those have now returned to work.
“In addition, some employers will have taken advantage of the flexible nature of the scheme and will have returned some staff on reduced hours, whilst also remaining on the job retention scheme on a part-time basis.”
On the significant time it may take the jobs market to recover, fellow paper author Dr Eoin Magennis said: “We're likely to be looking at unprecedented numbers of people becoming unemployed.
“The decisions taken over the length of time the furlough scheme continues will be a critical factor in numbers coming into job centres.
"So ensuring these centres are fully resourced and adopting methods to assess the future risk of long-term unemployment will be vital to ensure the labour market recovery is as fast as possible and that the level of scarring is minimised.”