As far as economic output is concerned, 2020 has been a year of extremes. Record rates of decline in Q2 followed by record rates of expansion in Q3. 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 and rebound will be the most extreme, but subsequent declines and rebounds will moderate. Not surprisingly, the latest Industrial Production and Index of Services (private sector only) from NISRA revealed further declines in output in Q4 2020. These two indices account for the vast majority of Northern Ireland’s Composite Economic Index. Given the scale of the declines revealed today, it is inevitable that the Composite Economic Index (a proxy for GDP), when published next month, will post a sizeable contraction.Continue reading
You could say that the less said about 2020 the better. But even when we look forward to 2021, in some respects, it’s 2020 all over again. This time last year, we were looking forward to the Olympics and Euro 2020. Once again this year, we’re looking forward to the Olympics and the Euro 2020. But that said, in 2021 there are going to be a whole series of new trends that impact upon economies, countries and businesses. So, what are they?Continue reading
It is that time of year when you are shopping for nephews and nieces. Gamble with a gift you are not sure they will like? Or play it safe with a voucher? What type of voucher – specific or generic? Or instead just plump for cash – the most flexible store of value there is. After all Cash is King!Continue reading
For decades, the most important basic skills taught in schools were the Three “Rs” – reading , (w)riting and ‘rithmetic. In recent decades, becoming ICT literate has been added to these functional skills of literacy and numeracy. While the texting and Xbox generation have become adept at embracing technology, more so than older generations, the same is not necessarily true for literacy and numeracy. Too many of our young people leave school without mastering these basic skills. This leaves them ill equipped for the world of work and dealing with life in general. Are we doing enough to address this? Every August (bar the one just passed) social media is awash with stories on results day. Best grades ever etc. You would be forgiven for thinking we had a world class education system. That holds true for some but it is a lousy system for a significant number of others. Northern Ireland society’s fixation with school league tables breeds a one-dimensional view of educational performance. Meanwhile, Northern Ireland continues to churn out a higher proportion of school leavers without any qualifications than any other UK region. This fact receives little airtime but we can’t sweep it under the carpet. We have an unusually high tolerance threshold for this failure in our education system. This is surprising when you consider the cost associated with the social problems that flow from these sub-optimal education outcomes.Continue reading
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.Continue reading
They say a week is a long time in politics and it can also be a long time in economics. Over the past seven days, we’ve had a wave of data released that tells us much about what happened in the third quarter of the year and how the local economy is currently performing.
Northern Ireland’s labour market statistics have provided a plentiful source of positivity in recent years. Unemployment has hit lows that no economist forecasted and employment has never been higher. The latest batch of data in the Labour Force Survey (June – August 2019) reveals some more record highs (e.g. employment amongst males). However, there are a variety of indicators that suggest that the labour market is on the turn. These signs of a weakening labour market must be placed in the appropriate context; namely, Northern Ireland’s labour market has never been stronger. Indeed, Northern Ireland’s unemployment rate remains at the ridiculously low level of 2.9%, just a shade above last month’s record low of 2.8%.
Economists are stereotyped as being, let’s say, not the most rock and roll people. But of late, those of us working on Northern Ireland have had reason to focus strongly on drugs, cigarettes and heavy metals. That’s because these are some of the subsectors of the economy and the manufacturing sector that have seen the biggest highs or are the most troubled.
There’s no shortage of information on the housing market, telling us how prices and sales activity for instance are changing on an annual, quarterly or even monthly basis. These surveys are important and give us a flavour of how the market, which is a key part of the economy, is performing. But there is a danger that we get too fixated on these numbers and miss a more important trend.