Business

North's labour market continues to improve, but productivity levels stagnate

Despite creating an additional 98,000 private sector jobs since 2006, the north's private sector is less productive 16 years on. Picture by Mal McCann
Despite creating an additional 98,000 private sector jobs since 2006, the north's private sector is less productive 16 years on. Picture by Mal McCann Despite creating an additional 98,000 private sector jobs since 2006, the north's private sector is less productive 16 years on. Picture by Mal McCann

THE north’s economy is still less productive than it was in 2006, despite creating almost 100,000 private sector jobs in the past 16 years, a leading economist has said.

The latest labour market report for Northern Ireland contained another set of encouraging results for the month of February, with employment and economic activity levels all continuing to rise.

Despite the challenging environment for many businesses, the number of employees on company payrolls rose 0.4 per cent over the month to 787,206, which was 2.2 per cent up over the year.

Meanwhile, the Quarterly Economic Survey (QES), which is based on responses from around 6,000 employers, estimated a record 810,210 employee jobs in Northern Ireland during December 2022, representing an annual increase of around 27,000 jobs (3.5 per cent).

The job growth saw the official unemployment rate dip to 2.4 per cent for the three months to January 2023, the same level as January 2020, before the Covid-19 pandemic.

It marked the second lowest unemployment rate on record for Northern Ireland.

But Ulster Bank’s chief economist Richard Ramsey said Northern Ireland’s key economic problem remains its level of productivity.

READ MORE: Republic's productivity 40% higher than north's, says think tank

“Private sector employment has risen by 20 per cent since the fourth quarter of 2006, yet output is 1.1 per cent below,” he said.

“So, despite an additional 98,000 private sector jobs, the private sector is producing 1.1 per cent less in the third quarter of 2022 than it did 16 years ago.”

It comes as Queen’s University and the Dublin-based Economic and Social Research Institute (ESRI) prepare to host a conference in Belfast next week addressing productivity levels in Northern Ireland.

Analysis published by ESRI in November comparing productivity levels on either side of the border, found productivity per worker in the Republic was around 40 per cent higher than in Northern Ireland during 2020.

The report, which is a joint research programme between the Department of Taoiseach’s Shared Island Unit and ESRI, will be discussed during Tuesday’s conference at Queen’s.