Residential property prices hit a 13-year high

The latest NI housing statistics, transactions, starts and completions for Q3 2021 were released this morning by NISRA.

Property prices, transactions and starts all rose year-on-year in Q3 2021. However, there was a modest year-on-year decline in housing completions (refers to house building not sales).

Estate agents and house builders have experienced a ‘V-shaped’ recovery. But, given the headwinds stemming from a shortage of housing stock, supply chain disruption and significant inflation with building materials, 2021 could well mark a peak in both transactions and house building activity. In 2022, residential property prices may be the only key housing market metric to still be on the rise.

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“Furlough – Probably the best pandemic policy in the world?”

The onset of the pandemic last year led economists to conservatively pencil in double-digit unemployment rates for the UK and Northern Ireland. What economists hadn’t initially factored in was the Chancellor’s Mario Draghi-style ‘Whatever it takes’ approach to protect jobs and prevent such an outcome from occurring. Rishi Sunak quickly unveiled the Job Retention Scheme (JRS) or furlough scheme. A policy designed to prevent mass unemployment by paying employers to keep jobs until the worst impacts of COVID-19 had passed. In time, economists progressively lowThe onset of the pandemic last year led economists to conservatively pencil in double-digit unemployment rates for the UK and Northern Ireland. What economists hadn’t initially factored in was the Chancellor’s Mario Draghi-style ‘Whatever it takes’ approach to protect jobs and prevent such an outcome from occurring. Rishi Sunak quickly unveiled the Job Retention Scheme (JRS) or furlough scheme. A policy designed to prevent mass unemployment by paying employers to keep jobs until the worst impacts of COVID-19 had passed. In time, economists progressively lowered their unemployment forecasts and revised down the anticipated surge in joblessness when the furlough scheme eventually ended. After several extensions, the Job Retention Scheme finally ended on the 30 September 2021. 

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NI new car sales soar by 2,594% y/y but sales volumes remain well down

Northern Ireland new car sales posted another freak year-on-year growth rate in May. There were 3,879 new cars sold locally last month. That represents a whopping 2,594% y/y increase on May 2020’s total (144) and compares with the 13,629% y/y rise recorded in the previous month. These jaw dropping growth rates are explained by the fact that comparisons are being made with last year’s lockdown lows.  For example, last April saw just  24 new cars sold. But these seemingly impressive growth rates, while welcome, compare unfavourably with pre-pandemic car sales volumes. 

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What a difference a year makes

Twelve months have passed since the labour market reacted to the pandemic induced slump in economic activity. The initial impact was most noticeable on the claimant count (the numbers claiming unemployment related benefit) and the HMRC’s payrolls data. The former posted a record monthly rise in April and peaked at 63,800 in May. That was more than double March’s figure of 30,500. Meanwhile the number of employees on the HMRC’s payrolls data tumbled by almost 12,000 over the same period. Unprecedented employment support measures, such as the Job Retention Scheme (JRS), steadied the ship, but 2020 was still a record year for redundancies.

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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.   

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Double dipping but economy set for growth this year

Living with lockdowns. Lockdown restrictions have had the effect of turning economic activity off and on. However, as the pandemic has progressed, subsequent lockdowns have been less severe on economic activity than the first. Many businesses have been able to adapt and function throughout lockdowns or pivot into new markets. The trajectory of economic output has largely followed a bungee jump. The initial fall (Q2) and rebound (Q3) will be the most extreme, but subsequent declines and rebounds will moderate.

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Rock bottom: official stats finally reveal impact on NI economy

Official statistics have finally revealed the scale of the much talked about economic impact on two key parts of the Northern Ireland economy. Following news earlier in the week that Northern Ireland posted its first quarterly decline in employee jobs in four-and-a-half years, figures today show a staggering slump in output. Both the Index of Services and Index of Production posted record rates of decline. Like a game of snakes and ladders, the COVID-19 pandemic has acted as a big snake taking industrial and services output back to square one or new series lows.

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Tipping point for the NI labour market?

Resilience in the face of recession – Throughout the pandemic many key labour market indicators have not been sending out distress signals.  For example, the number of employee jobs in Q1 was a record high and unemployment remained close to its all-time low. That doesn’t sound like an economy in the midst of its deepest recession on record. Unprecedented levels of support, not least from the Job Retention Scheme, have prevented employment falling off a cliff. A range of interventions have meant that while the UK economy experienced one of the sharpest declines in output (GDP) of any economy in Europe, employment within the UK has (for now) held up better than almost all of its former EU counterparts. Incidentally, the Republic of Ireland is at the other end of the league table for both measures – i.e. the RoI has experienced one of the shallowest recessions in terms of GDP but one of the deepest declines in employment within the EU.

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