Despite strong investment, record employment and (finally) real pay growth, weak spending slows the economy.
Once again Northern Ireland’s latest round of labour market statistics were littered with record highs and lows of the positive variety. The Labour Force Survey confirmed that the unemployment rate (ILO measure) fell to a new record low of 3.1% (UK = 4.2%) and was the lowest rate across all of the UK regions.
Today sees the release of April data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – signalled a mild acceleration in private sector business activity growth, while new orders continued to increase, albeit only marginally quicker than March’s 17-month low. Nonetheless, despite subdued demand pressures, backlogs of work increased further, prompting firms to hire additional staff. In line with a strong and accelerated rate of input cost inflation, businesses reported a further marked increase selling charges.
In the economic and political world, the term ‘full employment’ has come back from the dead. It was a prevalent term back in the days of Franklin D Roosevelt in the 1940s and Martin Luther-King advocated for it in the 1960s. It also crept back into political parlance in the dying days of George Osborne’s chancellorship in the UK around 2014. Today, we’ve heard it reemerge in the US, where the Fed has said that the US economy is “at or a little beyond full employment”, to some degree in the UK, and it hit the headlines a few weeks ago locally, prompted by a 280-character tweet by yours truly.
Two years of falling real wages look likely to come to an end, just what an embattled high street is crying out for.
The Ulster Bank NI PMI for February 2018 is out today. It signalled that the Northern Ireland private sector remained comfortably inside growth territory. That said, rates of expansion in output, new orders and employment all eased over the month. On the other hand, inflationary pressures intensified, with sharper rises in both input costs and prices charged.
One swallow a summer does not make, but two swallows? Probably still not enough for a turning point, however much we’d like the UK to crack its productivity problem.
Official figures continue to point to a buoyant Northern Ireland labour market in the third quarter of 2017. Private sector jobs notched up a thirteenth consecutive quarterly rise and are at their highest level since records began in 1974. Public sector job losses have stabilised (at least for the time being) and are around 10% below their 2009 peak. Overall, Northern Ireland has almost 19,000 more jobs (+3%) than at the pre-recession peak. Significantly, there has been a pick-up in full-time employment growth in Q3 which had previously been lagging behind the surge in part-time employment.
Today sees the release of November data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – pointed to further solid increases in output and new orders, with rates of expansion in both slightly quicker than those recorded in October. Rising workloads led to a further accumulation of outstanding business, with companies increasing staffing levels accordingly. Meanwhile, input cost inflation accelerated to a six-month high. Continue reading
- Derry/Londonderry sees 19% rise in employment opportunities during last quarter
- Production, Manufacturing and Materials jobs rise 50% in last 12 months
- IT remains most in-demand sector across NI