Chief Economist Richard Ramsey has appeared alongside NI Chamber Chief Executive Ann McGregor on the new business podcast hosted by Sarah Travers and brought to you by Ulster Bank.
Thrive in the New World: Episode 6 – The Economy
Author: Richard Ramsey
Statistical fog remains but younger generations are clearly bearing the brunt of COVID-19
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.
Chief Economist’s Weekly Brief – Back in the black
Global output returned to growth for the first time since January. July was a pivotal month for the PMI surveys with a surge in the number of economies crossing the expansion (>50) threshold. The US, Eurozone, UK, the Republic of Ireland and Northern Ireland PMIs all returned to growth last month for the first time since COVID-19 struck. Notable absentees still stuck in the red (contraction) include Brazil, India, Japan and Scotland.
Business activity returns to growth in July
Today sees the release of July data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – showed that companies in Northern Ireland increased their output amid signs of a recovery being underway following sharp falls earlier in the year. New orders also returned to growth, but employment continued to decline and firms were often required to lower selling prices in order to secure new work.
Car market revving up again with best July in 13 years
With the worst quarter on record for new car sales behind them, local dealerships finally enjoyed their first lockdown-free month in July. Following a 76% y/y decline in Q2, showrooms reported 4,398 new car sales last month. That represented a 17% increase on the corresponding month a year ago and marked the largest number of sales in five months. More importantly, it marked the best July for new car sales in 13 years according to the SMMT figures.
Chief Economist’s Weekly Brief – Uncomfortably numb?
Q2 GDP fell off a cliff. Yet months of shocking headlines has made record declines feel somewhat “normal”. They’re not. What is creating a stir is the rising number of hotspots locally as well as globally. The battle with the virus is going to be long, drawn out, and fraught with unpalatable trade-offs, especially between lives and livelihood.
Chief Economist’s Weekly Brief – Fleeting joy
Both the UK and the Euro area PMIs rebounded strongly in July. And, in a historic moment, the members of the Euro area finally agreed on the recovery fund, widely touted as the first step towards a limited fiscal union. But US indicators painted a more sobering picture, like a mirror to the world, revealing how things could stall if the virus spread intensifies.
Spend now tax later
Rishi Sunak may be a relative novice as Chancellor of the Exchequer, but he is already a veteran of economic statements and has outspent all of his predecessors. And come the autumn, we can expect an even more extensive set of measures to protect and create jobs in the autumn Budget.
Chief Economist’s Weekly Brief – Climbing out of a hole
The US economy had been sprinting into the lead, as key indicators for May and June recovered much of the pandemic imposed losses. But at a huge cost – the second wave will leave behind a weaker than earlier projected Q3. The UK’s disappointing May GDP data signalled a modest initial recovery. Welcome to the world of slow healing.
Chief Economist’s Weekly Brief – Shifting gears
As the data points to the initial post-Covid economic liftoff continuing, attention has turned squarely to limiting further economic fallout and encouraging the recovery. Last week Chancellor Sunak targeted support at the jobs market. This week European leaders meet to approve a proposed €750bn coronavirus recovery package. Expect plenty more in the coming months as the scale of the recovery challenge becomes ever more apparent.
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