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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You’re gonna need a bigger boat… or a helicopter

That was the conclusion the Chancellor has come to. Less than a week after the Chancellor unveiled a £12billion package to deal with Covid-19, Rishi Sunak unveiled another MASSIVE financial package (£350bn) on Tuesday and has vowed to do ‘Whatever it takes’. This is the famous line Mario Draghi ECB President came out with in summer 2012 to ‘save the euro’. Fiscal rules have been thrown out the window. Borrowing and public spending will surge. 

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No two shocks are ever the same…

Those who thought that uncertainty had peaked at the end of last year will have had cause to think again over the past seven days or so. The fact the word Brexit barely surfaced in discussions around Budget 2020 and other economic events over the past couple of weeks speaks volumes. We have moved to an entirely new crisis that has very much overshadowed the UK’s departure from the EU.

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Housing market – Up, flat and down

Like the labour market, Northern Ireland’s housing market has been one of the best performing parts of the local economy. One key difference, however, is the housing market hasn’t captured the record highs and lows that the labour market has enjoyed.  Following the most significant property downturn in UK history, the scars are still apparent in the various aspects of the housing market. While many of the indicators point to significant growth over the past decade, the story is one of recovery has opposed to recovered.  

Up – prices still rising albeit at a weaker rate

The latest batch of housing market statistics reveal that the recovery has succumbed to a slowdown. Property prices are the housing market statistic of choice for small talk at dinner parties.  For the past seven years the chat has been of continued house price growth. However, the latest figures from NISRA reveal that the pace of growth eased to 2.5% y/y in Q4 2019. That’s less than halve the pace of growth recorded the previous year and marks the slowest rate of house price growth since Q4 2013. Nevertheless, the rise in local property prices still compares favourably with the UK (+1.6%) and the Republic of Ireland (+1.0%).

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New decade, new language, new approach to capitalism?

One thing that has taken me a bit by surprise is the speed at which climate change has moved front and centre in economics. By-and-large, the environment and global warming were niche issues in business and financial debate. This was even the case early in 2019. But by the end of last year this had changed dramatically – helped in no small part by a Swedish teenager who I first saw addressing a crowd in front of the Brandenburg Gate in Berlin last March. Such was Greta Thunberg’s influence in this respect that she was named Time magazine’s person of the year 2019.

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