The furlough fog continues to obscure the true employment / unemployment picture within Northern Ireland’s labour market statistics. Together the Job Retention Scheme (JRS) and the Self-Employment Income Support Scheme (SEISS) have provided unprecedented financial support to over 316,000 workers in Northern Ireland. That equates to 37% of total employment. At its peak, 240,200 employees were on furlough (JRS) during the lockdown period with 76,000 self-employed benefiting from assistance. Since the economy reopened, a significant proportion of these workers (as yet unspecified) have returned to work. Another sizeable cohort will remain on furlough until the scheme expires in October. Only after the scheme has ended will we get a much clearer view of the true state of the labour market. Needless to say there will be a significant rise in unemployment and fall in employment.
The support measures above explain why unemployment (2.5%) in remains close to its recent all-time low of 2.3% despite a record fall in output in Q1 and Q2 (pending). Not surprisingly lockdown contributed to a fresh record low in the average number of weekly hours worked in Q2. Total average weekly hours by a typical full-time worker fell from 37.8 hours in the first quarter to 31.4 hours in Q2. The reopening of the economy should see a pick-up in the average hours worked in the coming months. Elsewhere, the latest statistics from NISRA revealed a deterioration in the labour market. According to the Labour Force Survey (LFS), there were 7,000 fewer people working in Q2 relative to Q1. Economic inactivity has also moved in the wrong direction with the number of people neither in work or looking for work increasing by 8,000 between the first and second quarters. These trends are expected to continue with redundancies coming in thick and fast in recent weeks. July saw 610 redundancies confirmed with a further 1,904 redundancies proposed. An additional 163 redundancies have been proposed between 1st – 10th August. Looking at the twelve months ending 31st July 2020 there were 8,755 proposed redundancies, marking the highest annual total on record.
Both the claimant count and the Labour Force Survey clearly highlight that the younger generations have already borne the brunt of the pandemic’s labour market impact thus far. The number of 16-24 year olds working in Apr-Jun was over 6% lower (-7,000) than Q1. Similarly, there were 2% (-4,000) fewer 25-34 yr olds working in the latest quarter relative to the previous one. The only other age-group reporting a fall in employment levels was the over 65s. Similar trends are evident within the claimant count data with the greatest rise in the numbers claiming unemployment related benefits occurring within the 18-24 age bracket. This age-group saw claimant numbers rise by 5% m/m and has accounted for more than one-quarter (8,580) of the total rise in benefit claimants (>33,000) that has occurred since March. Younger generations have been disproportionately impacted due to their higher concentration in those sectors most impacted from the pandemic (e.g. hospitality). Under 35s account for 55% of the rise in the number of unemployment related benefit claimants that has occurred between March and July.