Posted on Wednesday 15 May 2013 by Ulster Business
In a week that saw over a thousand new jobs announced across Northern Ireland, official statistics showed the number of people claiming unemployment benefits fell by 200 in April to 64,300, the third consecutive month that figure has decreased.
However, the overall unemployment rate in Northern Ireland increased by 0.3 percentage points over the quarter to 8.1%, putting the region above the UK average of 7.8%.
In the past week companies including Allstate NI, Linden Foods, Merchant Warehouse, Deloitte, Lloyds TSB and Wrightbus have committed to creating around 1,300 new jobs.
But while Northern Ireland's unemployment rate is lower than the most recent outcome for the Republic of Ireland of 14.2%, the figures still make for uncomfortable reading.
The Labour Force Survey showed that just over 60% of the jobless in Northern Ireland have been unemployed for a year or more, up 13.7 percentage points on a year ago. The report also showed that the unemployment rate for 18-24 year olds at 21.1% - up 3.3 percentage points over the year.
Danske Bank Chief Economist Angela McGowan said the fact that one in five young people is unemployed is still "a real cause for concern" from an economic perspective.
"In Europe the economic cost of youth unemployment was estimated to be equivalent to 1.2 per cent of GDP in terms of the cost of welfare benefits and lost output. For Northern Ireland the equivalent cost would amount to nearly £350m per year. With non-graduates being twice as likely to be unemployed as graduates, the emphasis on increased educational attainment for young people cannot be over-stated," the economist said.
Looking ahead Ms McGowan added: "It is always good to see the claimant count unemployment rate falling. To some degree, local initiatives such as the Jobs Fund and other measures to boost inward investment and enterprise will help to support the labour market. But we should not expect to see significant falls in unemployment this year. Our low levels of economic growth - around 0.4 per cent this year - are simply not high enough to dramatically boost local employment levels in 2013. That said, growth is expected to improve in 2014 and if we look at a recovering economy such as the US, we can see a very clear case of a labour market showing rapid improvement when economic growth starts to accelerate."
The Northern Ireland claimant count rate of 7.1% in April was the second highest amount the 12 UK regions as it has been for much of the last three years, and above the UK average of 4.5%.The annual increase here was also the highest among the UK regions.
But Enterprise Minister Arlene Foster preferred to focus on the decrease of 600 in the number of people signing on the dole over the past three months – the first time there has been a fall in three consecutive months since August 2007.
The Minister said: "Although there has been a rise in the unemployment rate over the quarter, the number of people on the claimant count in February has decreased. It is encouraging that the claimant count has now decreased for three consecutive months for the first time since August 2007.
"This fall of 600 in the claimant count over the last three months is very welcome. While it is too early to read too much into this, as there is still considerable uncertainty in the global economy, is important that we build on these positive signs.
"Over 1000 new jobs have been announced within the last week, the majority of which are high value with an average salary above the private sector average.This includes yesterday's announcement that Allstate are to create up to 650 new high quality jobs at their locations in Belfast, Londonderry & Strabane, which is a welcome boost for the North West.
"My continued aim is to ensure the Executive collectively supports a business environment that is attractive to inward investors and encourages locally owned companies to grow."