Further softening in Northern Ireland labour market - but wages still not keeping up with inflation

The number of payrolled employees in Northern Ireland in December was 783,800, which is up 2 per cent over the year. But wages still aren't keeping up with inflation
Gary McDonald Business Editor

WAGES in Northern Ireland rose by 6.3 per cent over the course of 2022 according to new government data.

But that's still not keeping up with inflation, which hit a 41-year high of 11.1 per cent in October before easing back into single digits before Christmas.

Updated statistics from the NI Statistics & Research Agency show that the north's labour market generally held up well in the September to November quarter, though in December the claimant count rose for the fourth consecutive month.

Unemployment and economic inactivity levels showed some general improvement over the year.

The number of payrolled employees in December was 783,800, which is a 0.2 per cent increase over the month and is up 2 per cent over the year.

Earnings indicated that employees here had an average monthly pay of £2,021 in December - an increase of £7 (or 0.3 per cent) over the month and an increase of £119 (just 6.3 per cent) over the 2022 calendar year.

Northern Ireland has seen the lowest increase in earnings of all UK regions since March 2020, with earnings here increasing by 15.9 per cent compared to 18.9 per cent in Britain.

But as wage growth continues to accelerate, it increases the risk of inflationary persistence, which the Bank of England's MPC is likely to rail against.

There were 80 redundancies confirmed in December, taking the rolling 12-month total to 730, the third consecutive annual total under 1,000.

Marie-Claire Logue, associate lawyer in the employment team at DWF Belfast, said: "Despite the challenging economic climate, the Northern Ireland labour market figures show that employee earnings and numbers have increased over the month, albeit remaining the lowest within the UK, with Northern Ireland also seeing the lowest monthly redundancies of the year.

"But further challenges lie ahead, with upcoming strike action and the ongoing cost of living crisis putting pay, and contractual terms, in the forefront of employee's minds.

"Employers should continue to create a supportive workplace structure with clear communication in place with how they are planning to overcome and manage these issues.”

Matthew Percival, CBI’s director for people and skills, said: “There are early signs of softening in the labour market, but many businesses are still struggling to hire, and pay growth is not yet easing the cost of living crisis.”