Northern Ireland’s record breaking labour market has been in the spotlight for quite some time. The focus has been on unemployment hitting all-time lows and the number of jobs reaching all-time highs in Q2 2019. In terms of job numbers, Northern Ireland’s labour market is clearly in a good place, having recovered all the jobs lost in the recession and created tens of thousands of additional jobs too. But what about wages and earnings?
Overall, there was something for everyone in the latest deal. The backstop was binned, there will be no hard border on the Island of Ireland and the UK will be free to follow its own independent trade policy. There was some surprise that the UK Prime Minister was able to secure a deal so quickly. While the EU made some concessions, the movement in negotiations was primarily due to Boris Johnson removing some of the UK government’s red lines.
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.
The UK Government and the European negotiating team have reached a new deal. Despite this the Prime Minister had to send a three-month extension request to the EU. However, there is still a chance that the deal will be passed into law before the 31st of October. With 11 days to go all options (deal, no deal, extension) are still on the table.
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%.
Uncertainty is the word that has perhaps come up even more often than Brexit in recent times. We talk about it a lot and even about how it is increasing. But how do we measure it and how do we know if things are more or less uncertain now than in the past?
Encouraging discussions between UK PM Johnson and Irish president Varadkar fuelled optimism of a Brexit resolution. However, the thorny issue of the Irish border remains a major stumbling block. Time is running out for a deal at October’s EU summit. Meanwhile, a “partial” US/China trade deal has been agreed but hurdles remain.
Today sees the release of September data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – indicated that the Northern Ireland private sector moved deeper into contraction, as Brexit uncertainty impacted negatively on firms’ operations. Output, new orders and employment all fell at sharper rates, while business sentiment dropped to a new record low.
It has proved difficult to replace the “infamous” Irish border backstop. It is still unclear if the PM has enough time and creativity to secure a deal before the mid-October deadline. After a historical ruling by the WTO the US has announced import tariffs on $7.5 billion of imports from the EU, effective October 18th.
The UK Supreme Court ruled unanimously that proroguing of the Parliament was unlawful. The Parliamentary session has resumed, but there is little clarity on Brexit’s form, date or on the timing of a general election. In the US the House of Representatives has started an impeachment inquiry. At the UN Climate Summit 66 countries, 93 companies and more than 100 cities announced commitments to reach net-zero emissions by 2050.