Business

Unprecedented job security - but cost-of-living insecurity

Elevated view of staff working in a busy open plan office
Gary McDonald Business Editor

NORTHERN Ireland's jobless rate has fallen to its joint lowest level on record, though on the flip side workers are seeing their salaries fall further behind rocketing inflation, latest government data shows.

Unemployment in the January-March quarter stood at 2.3 per cent. The last time it was that low was February-April 2020, just before the pandemic struck.

And despite record skills shortages, employers are continuing to increase their staffing levels.

Having briefly dipped below 70 per cent last year, Northern Ireland's employment rate hit 72.2 per cent in quarter one - not far off the record high posted in late-2019.

Employees in the north had a median monthly pay of £1,945 in April, an increase of £6 (or 0.3 per cent) over the month and £129 (7.1 per cent) over the year.

But Ulster Bank chief economist Richard Ramsey says: "This figure is inflated, as the comparison with last year was during the furlough scheme. The latter included workers on just 80 per cent of their salaries so the strong rebound is off this low.

"Nevertheless, the earnings growth will continue to lag well behind inflation. The expectation is that inflation will exceed 10 per cent in the coming months, which will represent a 40-year high.

"The unprecedented cost-of-living squeeze, exacerbated by tax increases, will quickly take the gloss off the current state of the labour market."

He added: "We are living in the strange world of unprecedented job security alongside severe cost-of-living insecurity. This is a new phenomenon for the UK and Northern Ireland economies."

Meanwhile payrolls in Northern Ireland hit another record high for the 11th month running, with 774,600 employees in April - an increase of almost 22,000 since March 2020.

While there has been encouraging growth in the private sector, including within information & communication (3,294 more jobs, up 13.3 per cent) and professional, scientific & technical services (3,666 more jobs, up 9.9 per cent), the bulk of the net employment growth since March 2020 has been within the public sector.

"Almost two-thirds of the 22,000 jobs growth over the last two years has been within public sector activities, and this source of employment growth has arguably run its course," Mr Ramsey added.

Elsewhere within the labour market data from the NI Statistics & Research Agency, economic inactivity continues to move downwards and, at 26 per cent, isn't far below 2019's record low of 25.5 per cent.

And Mr Ramsey said: "A savage cost-of-living crisis will incentivise an increasing number of economically inactive who can work and need to work into employment, which should push Northern Ireland's economic inactivity rate to a record low in the year ahead."

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