Record high in NI payrolls, but labour market recovery far from complete - economist
THE north recorded a record high in the number of payrolled jobs last month, but the labour market recovery is far from complete, a leading economist has warned.
Employees receiving their wages through HMRC PAYE in Northern Ireland hit 757,211 during in June, just over 10,000 more than in May and higher than the pre-pandemic record of 751,913, set in February 2020.
But the north is facing an upsurge in redundancies this summer as the UK Government winds down the furlough scheme. Some 59,000 people were still furloughed here at the end of May.
The number of self-employed people is also still 29 per cent below pre-Covid levels, with the pandemic wiping around 40,000 jobs from the official self-employment measure.
Ulster Bank’s chief economist, Richard Ramsey, yesterday warned the public not to be fooled into thinking the labour market has recovered from the pandemic.
“Far from it,” he said. “The headline HMRC payrolls data provides a flattering assessment of the true state of the local labour market.”
The economist said the return of indoor hospitality had a marked impact on the labour market in June, resulting in the biggest monthly surge in employment levels since the recovery took hold.
The hospitality factor is also expected to take a sizeable chunk out the 59,000 furlough figure during June.
But he said furlough continues to cloud the picture.
“Until the Job Retention Scheme expires in a few months’ time, the payrolls figures will continue to be inflated by staff on furlough,” said Mr Ramsey.
“It is anticipated that thousands of these jobs won’t see staff returning them either because the job is no longer viable without support or the employees will have moved elsewhere.”
Employers have had to pick up 10 per cent of their furloughed workers' pay since July 1. But that will rise to 20 per cent in August and September before the scheme is removed entirely.
However, there is growing speculation that the UK Chancellor will extend the furlough scheme or introduce some new support measure for the hardest hit sectors of the economy, including aerospace.
Nevertheless, the requirement for increased contributions from employers in July resulted in the highest number of redundancy proposals since November 2020.
Some 850 redundancies were proposed in the first two weeks of July alone, up from 490 for the entire month of June.
The figure only includes cases of companies making at least 20 people redundant.