Unemployment rate falls but for the wrong reasons?

During the three months to February 2017, Northern Ireland’s unemployment rate fell by 0.4 percentage points to 5.2% (UK = 4.7%). This represents the lowest unemployment rate since the period September – November 2008. Meanwhile, Northern Ireland’s youth unemployment rate (18-24yrs of age) dipped below the 13% mark for the first time in 7 years.  At 12.9% (UK = 10.4%), this is almost half the rate that prevailed at the peak in Q3 2013. Surely, cause for celebration? Continue reading

Chart of the Month – 10 years since the property price peak

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As we approach the 10th anniversary of Northern Ireland’s house price peak (and subsequent correction), we’ve been seeing some encouraging signs in the mortgage market.

2016 saw Northern Ireland notch up its fifth consecutive year of mortgage growth. According to the Council of Mortgage Lenders (CML) there were 13,800 loans advanced for house purchase. This represented a rise of over 5% year-on-year, with last year’s total representing the most mortgages advanced since 2007.

Despite a rise of 80 percent since 2008 though, mortgage volumes in Northern Ireland are still only half of what they were a decade ago.

The number of first-time buyers in Northern Ireland hit a 10-year high last year (8,000). However, this is still over 10,000 fewer than 2001’s peak.

The recovery in the mortgage market has been more marked within the First-Time Buyer (FTB) segment than the Home Mover market. The latter’s recovery has been somewhat disappointing.

In 2016, there were only 5,800 mortgages advanced in the Home Mover market; this was just 1/3rd of the volume of activity in 2006 and on a par with 1980/81. Lack of supply of certain property types and the legacy of negative equity are hampering this market.

House building is on the rise and people are gradually paying off their debt. But the legacy of what happened 10 years ago will continue to be felt for some time to come.

Women lead the way in labour market figures

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The headlines in Northern Ireland’s latest labour market statistics make for pleasant reading.

Unemployment is continuing to fall and fresh record highs and lows were established for the employment and economic inactivity rates respectively.

However, these headlines conceal a significant divergence with respect to gender. Continue reading

Chart of the Month – Wages still lower than in 2009

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Following the economic downturn, one of the primary reasons why households failed to experience the ‘economic recovery’ was due to what was happening with wages. Between 2009 and 2013, the median annual wage for full-time employees in Northern Ireland fell by £2,418 or 9% when adjusted for inflation. Since this low in 2013, annual wages have increased by £1,719 or 7.1% in real terms to £26,069. Despite this wage recovery, annual earnings of NI full-time workers are still  almost £700 below their recent 2009 peak.

The highs and lows of the labour market

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The latest batch of Northern Ireland labour market statistics was littered with highs and lows of the positive variety. Of particular note were the record high in Northern Ireland’s employment rate and the record low in the economic inactivity rate. These improvements were due to a notable improvement in female participation in the labour market. Other notable highlights included a record number of people in employment (847,000) in the three months to August 2016. Continue reading

Chart of the Month – Economic Surprise Index

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More than three months have passed since the UK’s EU Referendum result. Since then we have become all too familiar with three words “Brexit means Brexit”. The economic impact to date could also be summed up in three words: better than expected. The Citi Economic Surprise Indices measure data surprises relative to market expectations.  A positive reading means that data releases have been stronger than expected.  Conversely, a negative reading means that data releases have been worse than expected. During the month of May the incoming UK economic data was much weaker than market expectations, hence the negative readings with the Surprise Index.  However, following the EU referendum on 23rd June there has been a steady stream of better than expected data. Indeed, the UK Economic Surprise Index recently hit a three-year high. Economic indicators ranging from the labour market to retail sales have exceeded the consensus opinion amongst analysts in recent months. While economic conditions following the post-Brexit vote have not been as bad as feared, it is too early to draw any firm conclusions on the economic impact from Brexit.  After all, Brexit hasn’t taken place yet and the UK remains in the EU. Furthermore, we don’t have any clarity on what type of Brexit deal the UK Government envisages or what the EU will accept.