Fall in furlough but bigger fall to come

Comment on today’s HMRC update for the number of jobs furloughed in Northern Ireland as of 31 March 2021. 

Northern Ireland’s unemployment rate has been kept artificially low due to the arrival of the Coronavirus Job Retention Scheme (JRS) last year. The latest HMRC figures released this morning revealed that there were 99,400 jobs on furlough on 31st March 2021. That represented the first dip below 100,000 this year and a fall of 9,200 (-8%) relative to the end of February (108,600). Over two-thirds of these jobs were fully furloughed with the remainder partially furloughed. At the start of July 2020 there were a total of 139,100 jobs on furlough. This fell to a post-lockdown low of 65,100 at the end of September. The extension of the JRS and a return to lockdown saw the number of furloughed employments rise to a lower secondary peak of 117,700 in mid-January 2021.   

Almost 60% of the monthly drop in the numbers availing of JRS was due to a decline in the furloughed jobs within Wholesale and Retail; repair of motor vehicles (-2,710 jobs) and Accommodation and food services (-2,700 jobs). Both of these sectors posted monthly declines of 10% but together accounted for almost half (48%) of the total number of furloughed jobs. The second quarter should see a rapid descent in the number of employments furloughed with a progressive easing of lockdown restrictions at the end of April and again in late May. The reopening of non-essential retail and the hospitality sector is expected to lead to a similar fall in furloughed employment that occurred last August and September. Perhaps of more concern is the scale of furloughed employment within the manufacturing sector. This is arguably one of the least affected sectors from the various lockdown restrictions. Only 450 manufacturing jobs came off furlough in March relative to the previous month. That means a sizeable 9,560 jobs within manufacturing, or 1 in 9 of all jobs, are currently out of action.  The concern is that a significant number of these jobs may be lost when the furlough scheme expires. That worry is not just confined to manufacturing but to other sectors too. The lifting of lockdown restrictions removes just one barrier to a return to employment. For many of these furloughed jobs, however, the even bigger hurdle is will the businesses employing them still be viable?  While the idea of a ‘V-shaped’ recovery has been the topic of conversation since the pandemic arrived last year. The ‘V-word’ that will gain more prominence in the coming months will be Viability.

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