Summary of data
Labour Market
- Employment Rate, 70.6 per cent, dover the quarter, down over the year
- Unemployment Rate, 3.7 per cent, up over the quarter, up over the year
- Inactivity Rate, 26.6 per cent, down over the quarter, up over the year
Source: NISRA
Construction Output
- Down 30 per cent over the Quarter
- Down 30 per cent over the Year
Source: NISRA
Composite Index Output
- Economic Activity over the quarter -13.6 per cent
- Annualised Economic Activity -5.1 per cent
Source: NISRA
Chamber Economic Survey
Covid-19 Analysis
- Half of firms have or plan to reduce staff
- 3 in 4 using Job Retention Scheme
- A third have or plan to reduce working hours
- Firms making EU Exit preparations:
- Quarter 1 60 per cent
- Quarter 2 39 per cent
Source: NI Chamber of Commerce
DfE Monthly Economic Summary - October 2020
The latest IMF World Economic Outlook is forecasting a less severe
recession that it predicted in its June Outlook but the rebound
expected next year is also more moderate. Global GDP is projected to
drop by 4.4 per cent this year before growing by 5.2 per cent next year. GDP in the Euro Area and in the UK is forecast to decline by 8.3 per cent and 9.8 per cent respectively in 2020 before growing by 5.2 per cent and 5.9 per cent respectively in 2021.
The impact of COVID-19 on the Northern Ireland labour market is
further reflected in the latest Labour Force Survey estimates. The
number of people claiming unemployment benefits remained
unchanged over the month at 62,000 in September 2020, making it
the fifth month that the claimant count was above 60,000. There
were 8,860 proposed redundancies in the 12 months to September
2020, almost double the number recorded in the previous 12 months.
A further 570 redundancies have been proposed between 1st and
12th October. The number of confirmed redundancies (2,900) in the
year to September 2020 was slightly lower than the previous year
(3,130), with confirmation of 460 redundancies in September 2020.
The unemployment rate for June-August 2020 increased by 1.2
percentage points (pps) over the quarter and by 0.8pps over the year
to 3.7 per cent . This was the highest quarterly increase in the unemployment rate since October 2012. The NI rate was below the UK rate (4.5 per cent ), the Republic of Ireland rate (5.0 per cent ) and the EU (27) rate (7.2 per cent ). At the same time, the inactivity rate fell by 0.7pps over the quarter but rose by 0.2pps over the year to 26.6 per cent and the employment rate decreased by 0.3pps over the quarter and by 0.8pps over the year to 70.6 per cent .
The latest Northern Ireland Composite Economic Index (NICEI) for
Q2 2020 more fully covers the impact of COVID-19 on the local
economy. Economic output decreased by 13.6 per cent over the quarter and by 17.8 per cent over the year. On an annualised average basis, activity fell by 5.1 per cent over the last four quarters to Q2 2020 compared to the previous four quarters. The Index has fallen to a series low and is currently 20.8 per cent below the maximum value recorded in Q2 2007.
Although the measures are not produced on a fully equivalent basis,
UK GDP declined by 19.8 per cent over the quarter and by 21.5 per cent over the year to Q2 2020. UK GDP has also fallen to its lowest point over the period and is estimated to be 21.8 per cent below its maximum in Q4 2019.
The latest release of construction output statistics captures the direct
effects of COVID-19 and measures taken to reduce transmission of
the virus. The total volume of construction output in the Q2 2020
decreased by 30.0 per cent compared with Q1 2020, was 30.0 per cent lower than the same quarter in 2019 and 9.3 per cent lower on a rolling four quarter basis. The total volume of construction output in Northern Ireland has now reached a series low, with both the quarterly and annual decreases the largest on record. All 3 construction sub-sectors
(Housing, Infrastructure, Other work) showed a decrease when
compared with the previous quarter, where both Housing (-37.5 per cent )
and Other Work (-25.2 per cent ) have now reached series lows.
The latest results from the Ulster Bank PMI reported growth in the
local private sector for the third month running in September, with all
of the key indicators improving relative to August. New business was
broadly stable despite a further substantial reduction in new export
orders and sharp reductions in employment were recorded again.
Business sentiment rose to a seven-month high, but NI firms were still
on balance pessimistic regarding the 12-month outlook.
The latest NI Chamber of Commerce Quarterly Economic Survey
highlights some recovery in business activity after the severe collapse
experienced in Q2 2020. However, all key business indicators remain
negative in Q3 2020 and significantly weaker than before the
pandemic. COVID-19 also continues have a significant impact on
staffing - while the Job Retention Scheme has been a major support to
local businesses (accessed by three in four members), one in two have
or plan to reduce staff while around one third already have or plan to
reduce working hours. With less than three months left until the
transition period ends and new trading rules come into place, 39 per cent of members are currently making preparations for EU Exit. This
compares to 60 per cent in Q1 2020, demonstrating the negative impact of
COVID-19 on business preparedness.
The latest Danske Bank Quarterly Sectoral Forecasts expect the NI
economy to contract by 11.0 per cent in 2020 and then grow by 7.0 per cent in 2021. The average number of employee jobs is projected to fall by around 1.3 per cent in 2020 with a further decline of 2.8 per cent in 2021, with the annual average unemployment rate forecast to rise to 4.3 per cent in 2020 and rise further to 6.5 per cent in 2021.