Labour market improves again... but 36,000 hold their breath
THE north's labour market showed further signs of improvement last month, with the number in work rebounding to pre-pandemic levels.
But 36,000 people are still left holding their breath in anticipation of the end of the furlough scheme on September 30.
Furlough has been the backbone of the labour market throughout the pandemic, but its scheduled end may yet result in a sudden spike in unemployment.
The latest labour market statistics confirmed another record high for the number of pay-rolled staff in August, with more than 770,000 employees picking up a pay packet.
That was up 0.5 per cent on July and 1.5 per cent ahead of the pre-pandemic level in March last year (the third successive month it was above pre-Covid totals).
And while it represents 71.2 per cent of the working population, it compared to 75.2 per cent in the UK as a whole.
Redundancies remain low, with just 130 confirmed in August and only 80 proposed, and the economic inactivity rate fell too (down to 25.7 per cent).
The slump in self-employment also appears to have bottomed out, with figures suggesting it's back on the upturn.
Ulster Bank chief economist Richard Ramsey said: "The labour market looks to be in great shape.
"But the economy is nearing the point where tailwinds are waning and headwinds are intensifying, with government stimulus set to expire, inflationary pressures mounting and big tax rises likely in 2022."
The seasonally adjusted number of people on the claimant count in Northern Ireland in August was 48,500 (4.9 per cent of the workforce), which is a decrease of 1,000 (1.9 per cent) from the previous month’s revised figure.
The August claimant count is 24 per cent below the recent peak in May 2020 but 59 per cent higher than the pre-pandemic count in March 2020.
The latest HMRC payroll data show that, the number of employees has increased for nine consecutive months, with an increase of 2.3 per cent (16,900 employees) in the last three months alone.
British Chambers of Commerce head of economics Suren Thiru said: “The jobs market has continued its summer revival as demand for workers has surged following the easing of Covid restrictions.
“But record vacancies also highlight the acute hiring crisis faced by many firms. With Brexit and Covid driving a more deep-seated decline in labour supply, the end of furlough is unlikely to be a silver bullet to the ongoing shortages.
“These recruitment difficulties are likely to dampen the recovery by limiting firms’ ability to fulfil orders and meet customer demand.
“Although the peak in unemployment will be lower than previous downturns, with rising cost pressures and an increasingly onerous tax burden likely to stifle firms' recruitment intentions, a notable rise in job losses as furlough ends remains probable.
“Consequently, we expect the UK’s unemployment rate to rise to a peak of 5.1% by early 2022 - equivalent to another 174,000 people out of work.”