The number of people in payrolled jobs rose again last month, but the latest official data shows signs the north’s labour market is beginning to weaken.
The number of employees recorded by HMRC as receiving pay through PAYE (pay as you earn) hit just under 793,000 in July, an increase of 0.4 per cent on June and 1.9 per cent higher than the same month last year.
But the latest labour market survey from the Northern Ireland Statistics and Research Agency (Nisra) pointed to a rise in the rate of unemployment over the three months to June.
Nisra estimates the rate of unemployment was 2.7 per cent in the second quarter of 2023, 0.2 percentage points (pps) up on the first three months of the year.
Wage growth also stalled last month, with the median monthly pay remaining at £2,103 for July, albeit 7.5 per cent higher than July 2022.
Nisra estimates the north’s employment rate, i.e. the proportion of people aged 16 to 64 in work, dropped by 0.6pps in the second quarter to 71.4 per cent, with the rate of economic inactivity climbing 0.4pps to 26.6 per cent.
The more recent data on Northern Ireland’s unemployment benefits system from July pointed to a further weakening in the labour market.
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The north’s claimant count was 37,000 last month, an increase of 1.7 per cent from June.
Meanwhile, there were more signs of employers moving to cut their staff in July, with 250 redundancies proposed, almost double the monthly average recorded during 2022.
It follows last month’s labour market report, where employers notified Stormont of plans to shed almost 2,000 jobs.
The redundancy data captured by Nisra only relates to cases where employers cut 20 or more jobs.
Not all proposals to reduce staff result in job losses. Nisra said just 40 actual redundancies were confirmed in July, down from 220 in June.
That number is expected to rise in the coming months.
Mark McAllister, director of employment relations at the north's Labour Relations Agency (LRA), said more flexible working arrangements could help address the rising levels of economic inactivity.
"Through our working relationships with bodies such as Employers for Childcare and Melted Parents, the LRA is highlighting the importance of flexible working as a means of helping those who are currently economically inactive back into the workplace.
“In the absence of legislation or childcare strategies many employers are now bringing in more generous and widespread flexible working initiatives as a method of both recruiting and retaining staff.
“However, these flexibilities need to go beyond simply returning on a part-time basis," he added.
"Employers need to consider the cost of childcare and how hybrid working and other creative and flexible approaches can transform the ‘how’ and ‘where’ of work.”
