16 September 2019

DfE NI monthly economic update - September 2019

In Northern Ireland the latest labour market statistics show that the unemployment rate decreased over the quarter and over the year to a record low of 2.8%. The NI rate is below the UK (3.8%), RoI (4.6%) and EU (6.3%) rates. The employment rate increased over both the quarter and the year to 72.0%, the second highest on record. At the same time the inactivity rate decreased over the quarter (0.5pps) and year (1.3pps) to 25.8%. The number of people claiming unemployment benefits over the month was estimated at approximately 29,500 in August 2019.

The latest Quarterly Employment Survey shows that employee jobs increased over the quarter and over the year to a record high of 778,890. Increases were experienced in all broad sectors over the year, with the services sector accounting for the majority (73%) of jobs growth. Two-thirds of the new jobs created over the year have been in full-time positions. Similarly, the private sector accounted for the vast majority (86%) of jobs growth over the year.

NISRA's latest Index of Production (IOP) has increased by 1.2% over the quarter and by 3.6% over the year. The UK IOP reported a decrease in output over both the quarter and the year by 1.4% and 0.5% respectively. NI output has recovered 15.1% since the series low (Q3 2009). In contrast, the UK has recovered 5.5% over the same period.

The Index of Services (IOS) shows that output, in real terms, increased over the quarter by 0.8% and over the year by 0.5%. Services output is 2.6% lower than the highest point (Q4 2006) but has recovered 11.3% since the lowest point (Q2 2013) since the series began. The UK IOS reported growth in output over both the quarter and year, by 0.1% and 1.6% respectively.

In the year to June 2019, the value of NI goods exports (based on HMRC Regional Trade Statistics) was £9.15bn, an increase of 6.8% over the year. The largest markets for NI exports were the EU (£5.4bn, with £3.2bn of that to the RoI) and the USA (£1.1bn). Local exports continued to be dominated by machinery & transport equipment goods, accounting for just over one third of NI exports and up by 10.1% over the year to £3.32bn.

The Ulster Bank PMI for August shows that output has fallen for the sixth month in a row, with Northern Ireland recording the sharpest decline out of the 12 UK regions. Exports have fallen for the seventh month running and employment has declined for the eighth month in a row. Falls were again recorded in new orders and backlogs of work, while business sentiment dropped significantly during August with confidence hitting a record low.

According to NISRA's Labour Force Survey household results, 54% of households were ‘work rich' with 18% of households classed as ‘workless'. The results also show that 77% of females with children were economically active compared to 68% of females without children.

The EY Economic Eye Autumn Forecast 2019 predicts growth of 1.0% in 2019 and 1.1% in 2020 in the event of an orderly EU Exit. In a ‘no deal' EU Exit scenario, EY forecasts growth of 0.5% in 2019 followed by contraction of 0.6% in 2020.

NI shopper footfall declined during August 2019 by 3%, with footfall in shopping centres falling by 4.2%, the steepest decline since July 2018. Over the same period, footfall on Northern Ireland's high streets fell by 2.6%, the slowest rate of decline since April 2019.

Source: DfE Analytical Services Division September 2019