Summary of data
Growth Forecasts
- Global -4.7 per cent
- Euro Area -7.5 per cent
- UK -10.3 per cent
Labour Market
- Employment Rate, 70.5 per cent, down over the quarter, down over the year
- Unemployment Rate, 3.6 per cent, up over the quarter, up over the year
- Inactivity Rate, 26.8 per cent, down over the quarter, up over the year
Source: NISRA
Consumer Confidence
- Down over the quarter 3 2020
- Down over the year
Source: Danske Bank
PMI
- Business Activity Steady
- Business sentiment remains pessimistic
- Continued fall in staffing levels
- New orders decreased
Source: Ulster Bank
DfE Monthly Economic Summary - November 2020
The European Commission’s Autumn Economic Forecast expects the global economy to contract by 4.7 per cent in 2020, a considerably worse outcome than during the Global Financial Crisis. Similarly, Euro Area projections have been revised down from the Summer Forecast, contracting by 7.5 per cent this year, before returning to growth of 4.1 per cent in 2021 and 3.0 per cent in 2022. Furthermore, a UK rate of contraction of 10.3 per cent is expected in 2020, followed by growth of 3.3 per cent in 2021 and 2.1per cent in 2022.
The impact of COVID-19 on the Northern Ireland labour market is further reflected in the latest Labour Force Survey estimates. The unemployment rate for July-September 2020 increased over the quarter and over the year to 3.6 per cent. The NI rate is below the UK (4.8 per cent), RoI (5.4 per cent) and EU (7.4 per cent) rates. At the same time, the inactivity rate fell over the quarter and increased over the year to 26.8 per cent. While the employment rate decreased over the quarter and over the year to 70.5 per cent, it remains relatively high and above rates in 2017. However, the total number of hours worked per week during July-September remains 11 per cent below the total at the beginning of 2020.
The number of people claiming unemployment-related benefits decreased over the month to 60,200 in October, however, this is the sixth consecutive month that the claimant count was above 60,000. A total of 9,600 redundancies were proposed in the 12 months to the end of October 2020 with a further 710 proposed between 1 and 6 November. Furthermore 1,240 redundancies were confirmed in October, the highest monthly total this year and the second highest monthly total on record.
The latest results from InterTradeIreland’s Business Monitor (Q3 2020) illustrates the impact of COVID-19 and how this has had an impact on EU Exit preparations. Prior to the pandemic, 57 per cent of Northern Ireland firms say they were in growth mode; this has nowdropped to 22 per cent. Meanwhile, the number of businesses that are in are in decline has jumped from 8 per cent and now stands at 46 per cent. Consequetly, the Monitor reveals that only 18 per cent of firms have made EU Exit preparations.
The latest estimates from the Annual Survey of Hours and Earnings (ASHE) indicate that median gross weekly earnings for full time employees (“weekly earnings”) in April 2020 were £529, a decrease of 1.1 per cent from £535 in 2019. This is the first annual decrease in weekly earnings 2014 and the largest decrease on record. Real weekly earnings decreased by 2.0 per cent. This is the second decrease in real earnings in the last five years and brings real earnings close to levels in 2010. NI now has the second lowest weekly earnings of the 12 UK regions, with London (£761) the highest and the North East (£521) the lowest. Approximately one fifth of all jobs in NI were ‘low paid’. This is the lowest proportion in NI in 20 years but is the highest proportion of the UK regions.
The latest results from the Ulster Bank PMI signalled a stagnation of business activity across the local private sector as new business, backlogs of work, new orders from abroad and staffing levels all fell again. On the price front, rates of inflation of both input costs and output prices quickened. Meanwhile, business pessimism increased in October with Northern Ireland again the only area of the UK to predict a fall in output over the coming year.
The latest Danske Bank Consumer Confidence Index showed that consumer confidence decreased in the third quarter of 2020 as the coronavirus pandemic, EU Exit and the performance of the economy weighed on consumers. The Index fell from 122 in Q2 2020 to 119 in Q3 2020 and remained well below the reading of 131 posted in Q3 2019.
Prepared by DfE Analytical Services Division, November 2020 analyticalservices@economy-ni.gov.uk