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.

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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.  

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Come back in the autumn

Rishi Sunak may only have been Chancellor for five months but he is already a crisis veteran. Having already splashed out hundreds of billions of pounds worth of support – £281.5bn since 11 March 2020 – today’s package added a further £30bn. Phase 1 of the Chancellor’s response was about protection via blanket support for the economy. Significantly Phase 2 of the economic response, today’s package, is more targeted support and focussed on jobs. The third phase is rebuilding. 

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Spike!

Incoming economic indicators have been hitting record highs and lows of the negative variety. April was the first month of a full lockdown so data linked to this month has been dire. All of the UK regional PMIs posted record lows in April with Northern Ireland the weakest of all. New car sales has been another area showing staggering rates of decline, with the UK and NI posting 97% and 99% year-on-year declines respectively. Last month saw the fewest new car sales since 1946. Comparisons with WWII are coming in thick and fast. Staggering rises, as opposed to falls, are the concern with global unemployment trends. For example, the US unemployment has already hit a post-WWII high of close to 15%. Today we finally got the first meaningful  indications of the COVID-19 impact filtering through into the UK and Northern Ireland official labour market data.

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Millenial Déjà Vu

Last year was one of the best years ever to enter the labour market in Northern Ireland. Jobs were aplenty across a broad range of disciplines. It was arguably the case that anyone who wanted to engage in work could find an opportunity to do so. Indeed there wasn’t the supply of labour to meet employers’ demand, making it a seller’s market. Employers increased salaries to address widespread skills shortages – particularly in ICT. Even lower and unskilled jobs saw significant pay growth with big increases in the National Living Wage. Fast forward a few months and the labour market landscape is unrecognisable. 2020 will prove to be a contender for the worst year ever to enter the labour market in Northern Ireland.

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