Northern Ireland Labour Market Slide Pack - December 2013

Northern Ireland Labour Market Update

Issued 23rd December 2013

Richard Ramsey

Chief Economist Northern Ireland

[email protected]

Twitter: @UB_Economics

mailto:[email protected]

ContentsSlide Numbers

1. Labour Market Summary 3-4

2. Workforce Jobs – (including NI & UK comparisons) 5-9

2 . NI Quarterly Employment Survey – (including sector performance) 10-20

3. NI’s Job Losses, Recovery & Current Position - (including sector performance) 21-24

4. NI’s ‘Employment Recessions’ & Recoveries Compared 1980s v 1990s v 2007/08 - 2013 (includes sector performance) 25-29

5. NI Public & Private Sector Employee Performance 30-35

6. NI v UK Employee Job Performance - (including sector performance) 36-45

7. NI v UK Full-Time & Part-Time Employment Performance 46-58

8. Ulster Bank PMI Employment Performance 59-70

9. Unemployment Trends (includes claimant count & Labour Force Survey) 71-86

10. Earnings (includes analysis from NI Annual Survey of Hours & Earnings 2013) 87-94

NI Labour Market Summary (1)NI’s total workforce jobs increased by 0.7%, or +5,300 jobs, over the year to June 2013. This took the total number of workforce jobs (includes employees & self employed) to 808,900 jobs in June 2013. This is 49,300 (-5.7%) below NI’s peak in June 2008. By comparison, UK workforce jobs in June 2013 were just 0.1% below their pre-downturn peak.

NI recorded its 7th consecutive quarterly rise in Q3 2013 according to the latest Quarterly Employment Survey (QES). There were 3,300 jobs created in Q3 alone and a cumulative net gain of 11,400 jobs during the last 7 quarters. The latter represents over one quarter of the jobs lost during the downturn.

All NI sectors posted employment growth in Q3 2013 with construction posting only its 2nd quarterly gain since Q4 2007. Despite this increase, NI’s construction employment remains almost 37% below its pre-downturn peak. Construction / property related sectors have posted the steepest job losses over the last 5 years.

Full-time employees have borne the brunt of the job losses in the UK, NI and the Republic of Ireland (RoI). However, all three economies saw the rate of job creation accelerate in Q3 2013. The RoI and the UK posted year-on-year increases of 3.8% and 2.2% respectively. Meanwhile full-time employment in NI increased by 8,810, or 2.3%, over the year to Q3 2013. This represented the fastest rate of employment growth since Q1 2008. Despite this recent rise, the number of full-time jobs in NI in Q3 2013 remains 4.3% (or 20,410 jobs) below the corresponding figure in Q3 2008 and 5.5% (26,530) below the peak recorded in Q1 2008.

The Ulster Bank PMI suggests that NI will record further employment growth, across all sectors, in Q4 2013.

NI’s claimant count, or dole queue, fell for the 10th successive month in November 2013 to 60,200. This represents acumulative fall of 4,700 relative to NI’s claimant count peak of 64,900 in January 2013.

NI has the highest claimant count unemployment rate of all the UK regions at 6.7% (UK = 3.8%). The NI-UK unemployment differential (2.9 percentage points) is now wider than it was when the Good Friday Agreement was signed back in April 1998.

NI Labour Market Summary (2)

Using the ILO unemployment measure, NI’s unemployment rate in the three months to October 2013 stood at 7.5%. This compares with 12.7% for the Republic of Ireland and 7.4% for the UK. NI’s relatively low ILO unemployment rate, when comparing with the UK average, is due to the high levels of economic inactivity. NI continues to have the highest rates of economic inactivity within the UK (27.4%). This has the effect of lowering NI’s headline unemployment rate as there is ‘hidden unemployment’ within the economically inactive. Furthermore, at 67.0%, NI has the lowest employment rate of all the UK regions (UK = 72.0%).

Using the ILO unemployment measure it is noted that NI has the 2nd highest rate of youth unemployment (after London) within the UK. NI’s unemployment rate for 18-24year-olds currently stands at 23.8%. This compares with 18.6% for the UK as a whole. NI’s youth unemployment rate is more than twice the rate that prevailed when the Good Friday Agreement was signed.

NI has the lowest median gross annual earnings of all the UK regions. According to the latest Annual Survey of Hours and Earnings 2013, NI’s gross annual earnings for all full-time employees stood at £23,904. This was some 11.5% lower than the UK average of just over £27,000. NI’s low annual earnings are due to below average earnings within the private sector.

NI’s gross weekly earnings for full time employees within the private sector are some 18% below the equivalent figure in the UK.

Since the Good Friday Agreement was signed in April 1998, the gap between the NI-UK median wages for full-time employees has narrowed for women but widened for men.

The rate of inflation has outpaced earnings growth for most individuals since the recession began in 2008. After inflation, the median private sector wage for all employees (full-time & part-time) has fallen by almost 20%. Meanwhile the corresponding figure for the public sector has increased by almost 6%.

Those individuals aged under 40 years have experienced the biggest falls in real earnings between 2008-2013.

Workforce JobsEmployee Jobs + Government Supported

Trainees + Self-employed

49,300 fewer workforce jobs in June 2013 relative to June 2008 – a fall of 5.7%

NI Workforce in Employment Jobs (Employee Jobs + Self Employment + Govt supported trainees)

808.9k858.2k

803.6k

500,000

550,000

600,000

650,000

700,000

750,000

800,000

850,000

900,000

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Source: DFP, jobs in June of each year

14,200 fewer self-employed jobs in June 2013 relative to June 2008 – a fall of 11.6%

NI Self-Employment Jobs

108k

122.2k

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000

140,000

150,000

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Source: DFP, jobs in June of each year

NI has not experienced the jobs recovery that has occurred within the UK but is now playing catch-up

NI & UK Workforce Jobs Annual % Growth

-6%

-4%

-2%

0%

2%

4%

6%

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Y/Y

NI UK

Source: DFP & NOMIS, jobs in June of each year

UK workforce jobs are just 0.1% below their June 2008 peak whereas NI is 5.7% below its pre-downturn peak

NI & UK Workforce Jobs (as of June 2013)

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

June 2008 Peak to Trough Recovery from Trough Net Position Relative toJune 2008 Peak

NI UK

Source: DFP & NOMIS, June annual figures

Quarterly Employment Survey (QES)

QES is an employer survey (@ 5,500 companies) that measures the actual number of jobs (employees in

employment) as opposed to the number of individuals in employment (as in the Labour Force Survey). The QES

excludes the self-employed but is the preferred measure of employment within Northern Ireland

Summary Table – Quarterly Employment SurveyConstruction Services Manufacturing Total Public* Private*

2007 Q1 43,460 567,160 83,870 715,550 220,250 495,180

Q2 44,710 571,080 84,070 720,760 220,730 500,310

Q3 45,320 575,090 83,940 725,420 219,370 506,240

Q4 46,820 578,880 83,470 729,340 219,780 509,100

2008 Q1 45,860 582,950 83,750 732,690 219,880 512,820

Q2 44,860 584,490 83,350 733,070 218,440 515,020

Q3 43,500 581,240 82,220 727,400 216,100 511,290

Q4 41,670 579,540 80,130 721,370 224,100 496,970

2009 Q1 39,420 577,730 78,230 715,340 224,460 490,920

Q2 38,210 577,080 75,290 710,490 225,030 485,690

Q3 36,780 577,450 74,010 708,030 225,390 482,510

DISCONTINUITY IN DATA SERIES

Q4 37,120 580,970 73,330 711,250 225,010 486,100

2010 Q1 36,960 579,810 73,150 709,760 223,560 486,340,Q2 36,200 579,080 73,030 707,930 221,790 486,290

Q3 35,790 576,250 72,930 704,770 219,630 484,920

Q4 33,610 573,540 73,850 700,830 219,330 481,470

2011 Q1 33,370 573,340 73,690 700,250 216,810 480,510

Q2 32,780 570,770 73,430 697,240 216,810 480,510,Q3 32,930 569,060 73,750 695,750 215,340 480,150

Q4 31,640 564,690 75,490 691,620 214,090 477,560

2012 Q1 31,480 565,630 74,820 691,750 214,430 477,490

Q2 31,360 566,100 75,240 693,320 213,830 479,530

Q3 31,020 567,840 74,990 694,390 214,030 480,070

Q4 29,820 569,960 74,340 694,720 214,500 480,270

2013 Q1 29,630 570,840 74,470 695,440 214,680 480,880

Q2 29,400 574,030 75,670 699,720 215,170 484,530

Q3 29,720 576,230 76,370 703,020 215,130 487,640

Latest Quarter Q/Q % Change 1.1% 0.4% 0.9% 0.5% 0.0% 0.6%

Latest Quarter Y/Y % Change ‐4.2% 1.5% 1.8% 1.2% 0.5% 1.6%

Fall from peak ‐ Nos ‐17,100 ‐8,260 ‐7,700 ‐30,050 ‐5,600 ‐27,380

Fall from peak % Change ‐36.5% ‐1.4% ‐9.2% ‐4.1% ‐2.5% ‐5.3%

Northern Ireland Employees Jobs (Seasonally Adjusted)

DISCONTINUITY IN DATA SERIES↓ New Series ↓

Source: DFP, *Public & Private splits may not sum to total,** includes transfer of part‐nationalised financial institutions from private to public sector. Peak to trough fall does not strictly use comparable data and is indicative only

DISCONTINUITY IN DATA SERIES↑ Old Series ↑

↓ New Series ↓

↑ Old Series ↑↑ Old Series ↑

↓ New Series ↓

NI posts its second largest quarterly increase (+3,300) in over 5 years (Q4 2009 represents start of new series & therefore not a Q/Q rise)

NI Employee Jobs Quarterly ChangeExcludes self-employed

-8000

-6000

-4000

-2000

0

2000

4000

6000

Q3 2006 Q1 2008 Q3 2009 Q3 2010 Q1 2012 Q3 2013

Nos

Source: DFP

Discontinuity in Series

25,040

19,630

+11,400

NI posts its 7th consecutive quarterly rise in Q3 2013 of 0.5% or 3,300 jobs (Q4 2009 represents start of new series & therefore not a Q/Q rise)

NI Employee Jobs Excludes Self-Employed

-1.0%-0.8%-0.6%-0.4%-0.2%0.0%0.2%0.4%0.6%0.8%1.0%

Q32006

Q22007

Q12008

Q42008

Q32009

Q42009

Q32010

Q22011

Q12012

Q42012

Q32013

Q/Q % Change

-4%

-3%

-2%

-1%

0%

1%

2%

3%Y/Y % Change

Q/Q Y/Y

Source: DFP


Current employment levels back at late-2005 levels

Northern Ireland Employee Jobs

703,020

613,250 Q2 1998

733,070

500,000

550,000

600,000

650,000

700,000

750,000

Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013

Source: DFP


Service sector posts its 7th consecutive quarterly rise

NI Services Employee Jobs Quarterly ChangeExcludes self-employed

+11,540

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

Q22007

Q12008

Q42008

Q32009

Q42009

Q32010

Q22011

Q12012

Q42012

Q32013

Nos

Source: DFP


-7,410-16,280

Service sector employment is back to late-2007 levels

Northern Ireland Services Employee Jobs

574,030

Q2 1998454,990

584,490

375,000

425,000

475,000

525,000

575,000

625,000

Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013

Source: DFP


Manufacturing employment posts its third successive quarterly increase 0.9% q/q (700 jobs) in Q3 2013

NI Manufacturing Employee Jobs Quarterly Change (Excludes self-employed)

-3,000

-2,500-2,000-1,500

-1,000-500

0

5001,0001,500

2,000

Q22007

Q12008

Q42008

Q32009

Q42009

Q32010

Q22011

Q12012

Q42012

Q32013

Nos

Source: DFP


-9,740

Manufacturing employment is now at its highest level since Q1 2009 after the long-term trend of job losses

NI Manufacturing Employee Jobs Levels

84,070Q2 2007

76,370

104,940 (Q3 1998 just after GFA)

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013

Source: DFP


Construction sector posts only its second quarter of employment growth since Q4 2007

NI Construction Employee Jobs Quarterly Change (Excludes self-employed)

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

Q3 200

7Q1 2

008

Q3 200

8Q1 2

009

Q3 200

9

Q1 201

0Q3 2

010

Q1 201

1Q3 2

011

Q1 201

2Q3 2

012

Q3 201

3Q3 2

013

Nos

Source: DFP


-10,040+320

Construction employment back to Good Friday Agreement (1998) levels

NI Construction Employee Jobs Levels

29,720

46,820

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013

Source: DFP, QES


Back to 1998 levels

Northern Ireland’s Job losses, recovery and

current (net) position 2007/08-2013

All sectors have now shown some signs of recovery

Northern Ireland Employment (Employee Jobs)

-40%

-30%

-20%

-10%

0%

10%

All Sectors Services Manufacturing Construction

Peak to Trough Recovery from Trough Q3 2013 Relative to Peak

Source: DFP, QES

Utilities post largest annual % gain over the last year whilst construction records the biggest decline

Construction / property related


Utilities, Admin, Manufacturing, ICT & tourism related sectors

Broad Industrial Group Net Job Change % Change

Year‐on‐Year Risers

Electricity, gas, steam & air conditioning supply 180 12.6%

Administrative & support service activities 2,850 6.8%

Professional, scientific & technical activities 1,570 6.6%

Information & communication 940 5.9%

Real estate activities 300 4.2%

Human health & social work activities 2,360 2.0%

Manufacturing 1,390 1.8%

Accomodation & food service activities 700 1.7%

Transport & storage 160 0.7%

Other service activities 90 0.7%

Wholesale & retail trade; repair of motor vehicles 780 0.6%

Agriculture, forestry & fishing 10 0.1%

Mining & quarrying 0 0.0%

Year‐on‐Year Fallers

Public administration & defence; social security ‐130 ‐0.2%

Arts, entertainment & recreation ‐40 ‐0.3%

Education ‐260 ‐0.4%

Water supply, sewerage, waste management ‐40 ‐0.8%

Financial & insurance activities ‐730 ‐3.8%

Construction ‐1,300 ‐4.2%

Total 8,810 1.3%

Source: DFP ‐ Quarterly Employment Survey (Seasonally Unadjusted), Excludes self‐employed

Northern Ireland Employment Change (Ranked by % change)September 2012 ‐ September 2013

↓↓↓

↑↑↑

Utilities, Admin, Manufacturing, ICT & tourism related sectors

Property related sectors & manufacturing have seen the biggest job losses over the last 5 years



Utilities, Real Estate,

Entertainment & Agriculture

Broad Industrial Group Net Job Change % Change

Year‐on‐Year Risers

Electricity, gas, steam & air conditioning supply 420 35.3%

Real estate activities 1,010 15.6%

Arts, entertainment & recreation 1,290 9.3%

Professional, scientific & technical activities 1,440 6.0%

Agriculture, forestry & fishing 560 4.6%

Human health & social work activities 3,750 3.3%

Administrative & support service activities 1,260 2.9%

Information & communication 430 2.6%

Other service activities 140 1.0%

Year‐on‐Year Fallers

Education ‐440 ‐0.7%

Accomodation & food service activities ‐840 ‐1.9%

Public administration & defence; social security ‐2,680 ‐4.6%

Wholesale & retail trade; repair of motor vehicles ‐6,110 ‐4.7%

Transport & storage ‐1,280 ‐5.0%

Water supply, sewerage, waste management ‐250 ‐5.1%

Manufacturing ‐5,930 ‐7.2%

Financial & insurance activities ‐1,830 ‐9.1%

Mining & quarrying ‐470 ‐22.0%

Construction ‐13,780 ‐31.7%

Total ‐23,340 ‐3.2%

Source: DFP ‐ Quarterly Employment Survey (Seasonally Unadjusted), Excludes self‐employed

Northern Ireland Employment Change (Ranked by % change)September 2008 ‐ September 2013

↑↑↑

↓↓↓

Utilities, Real Estate,

Entertainment & Agriculture

Northern Ireland’s ‘Employment Recessions’ & Recoveries Compared

1980s

1990s

2008-2013

Job losses in the latest downturn not as steep as the 1980s. But returning to peak is likely to take longer than 1980s (10yrs)

NI Employee Jobs Recessions / Recoveries Pre-Recession Peaks Indexed = 100

1980s10yrs after downturn

employment returns to peak

1990s10yrs after peak employment

rose by 19%

80

85

90

95

100

105

110

115

120

125

Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs 8yrs 9yrs 10yrsTime Since Pre-Recession Peak

Index

1980s 1990s 2008-2013

2008-20135 years (21 quarters) after 2008 Q2 peak NI jobs

are still 4.1% lower as of Q2 2013

Employment troughed (-7.5%)13 quarters after 1979 Q4 peak & was 5.9% below peak after 21 quarters

(just over 5 years)

In 1990 UK recession, NI employment fell slightly & troughed 2 years after the pre-

recession peak

Source: DFP & UB Calculations

Manufacturing job losses have been nowhere near what they were like in the 1980s but recovery may be similar

NI Manufacturing Recessions & Recoveries in Employee Jobs (Pre-Recession Peaks Indexed = 100)

employment was 27% lower >6 years after Q2 1979 peak

0.7% below Q3 1990 peak after >6 years (25 quarters)

>6 years (25 Quarters) after Q2 2007 peak employment

is 9% lower

65

70

75

80

85

90

95

100

105


Index

1980s 1990s 2007-2013


In terms of job losses, construction has experienced its fastest & deepest recession on record

NI Construction Recessions & Recoveries Compared (Employee Jobs Pre-Recession Peaks Indexed = 100)

Peak 1979 Q2

Peak 1990 Q3

2007Q4 - 2013 Q3

50

60

70

80

90

100

110

120

130


Index

1980s 1990s 2007- 2013

Source: DFP & UB calculations

Current recession has seen construction employment plummet. Almost 6 years (23 quarters) after the downturn employment was still 36% below Q4 2007 peak. At this stage of the 1980s

recession employment had fallen by just 26%

Service sector jobs recovery underway. However, it remains the slowest and weakest recovery to date

NI Service Sector Recoveries in Employee JobsPre-Recession Peaks Indexed = 100

+15% rise in 10 years

+27% rise in 10yrs

Peak Q1 2008 - Q3 2013

80

85

90

95

100

105

110

115

120

125

130


Index

1980s 1990s 2008-2013

This is the weakest & slowest service sector recovery. 21 quarters on employment still 1.4% below peak

1990s: NI lacked a developed private services sector which explains lack of job

losses in early 1990s UK recession


1980s: 21 quarters after employment peak service sector employment was 4% above

pre-recession peak

NI Public Sector v Private Sector Employment Levels

& Growth

Headline public & private sector growth rates are misleading due to reclassification of some institutions as public sector

NI Public & Private Sector Employment Growth

-6%

-4%

-2%

0%

2%

4%

6%

Q31993

Q31995

Q31997

Q31999

Q32001

Q32003

Q32005

Q32007

Q32009

Q32011

Q32013

Public Private

Source: DFP

Job gains exaggerated as @5k jobs in financial institutions

reclassified as public sector

Job losses exaggerated as @5k jobs in financial institutions moved

from private to public sector

Both public & private sector employment levels are higher in Q3 2013 than they were last year

NI Public v Private Sector Employment Growth

-6%

-4%

-2%

0%

2%

4%

6%

Q31993

Q31995

Q31997

Q31999

Q32001

Q32003

Q32005

Q32007

Q32009

Q32011

Q32013

Public* (excluding financial institutions)Private* (incl. part-nationalised institutions)

Source: DFP, *Ulster Bank estimates

Return of private sector jobs

growth

Private sector employment growth has risen in each of the last 6 quarters but is still at mid-2006 levels

NI Private Sector Employee Jobs

487,640

515,020

491,640

325,000

350,000

375,000

400,000

425,000

450,000

475,000

500,000

525,000

550,000

Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013

Private Sector Unadjusted for Financial Institutions reclassification

Private Sector Adjusted (incl. part-nationalised institutions)

Source: DFP & UB estimates

Good Friday Agreement

Signed April 1998418,170 Q2 1998

Public sector employment boom has been & gone. A period of job losses (attrition & non-replacement) is anticipated

NI Public Sector Employee Jobs Levels

Good Friday Agreement April 1998

195,120 Q2 98

Pre-recession peak Q4 2005221,040

215,130

211,130

180,000

190,000

200,000

210,000

220,000

230,000

Q31993

Q31995

Q31997

Q31999

Q32001

Q32003

Q32005

Q32007

Q32009

Q32011

Q32013

Public Unadjusted Public Adjusted* (excl. financial institutions)

Source: DFP, * UB estimates

Public sector employment boosted by @5k in Q4 2008 as

part-nationalised financial institutions reclassified as public sector. Public sector

jobs (excl. financial institutions) now estimated at @211k or

2003 levels.

+26,000 jobs (13%) in 7yrs

post GFA

Private sector employment remains an estimated 4.5% since peak with public sector down an estimated 3.4%

NI Public & Private Sector Employment % Change Q2 2008 - Q3 2013

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

Headline Public Sector Headline PrivateSector

Public Sector*(excl.part-nationalisedfinancial institutions)

Private Sector* (incl.part-nationalised

financial institutions)

Source: DFP & *UB Estimates

NI V UK Employment Performance Employee Jobs by Sector

NI & the UK both post strong rates of employment growth in Q2 & Q3 2013

NI v UK Quarterly Employment Growth (Employee Jobs)

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013

Q/Q

NI UK

Source: DFP & NOMIS

NI playing catch-up with the UK employment recovery

NI & UK Annual Employment Growth

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

Q31983

Q31986

Q31989

Q31992

Q31995

Q31998

Q32001

Q32004

Q32007

Q32010

Q32013

NI UK

Source: DFP & NOMIS

NI outperformed the UK in the early 1990s but not now

NI playing catch-up with UK employment recovery

NI’s construction sector posts a quarter of growth after 7 quarters of decline

NI v UK Construction Employment Growth Q/Q (Employee Jobs)

-8%

-6%

-4%

-2%

0%

2%

4%

Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013

Q/Q

NI UK

Source: DFP & NOMIS

UK construction industry posts modest 0.4% y/y decline in Q3 2013 while NI records a hefty 4.2% fall

Construction Annual Employment Growth Employee Jobs

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Q31983

Q31986

Q31989

Q31992

Q31995

Q31998

Q32001

Q32004

Q32007

Q32010

Q32013

NI UK

Source: DFP & NOMIS

NI outperformed the UK in the early 1990s

but not now

Both NI & UK post strong rates of manufacturing employment growth in Q2 & Q3 2013

NI v UK Manufacturing Employment Growth Q/Q (Employee Jobs)

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013

Q/Q

NI UK

Source: DFP & NOMIS

NI’s employment recovery within the manufacturing sector has outperformed the UK

NI & UK Manufacturing Annual Employment Growth

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Q31983

Q31986

Q31989

Q31992

Q31995

Q31998

Q32001

Q32004

Q32007

Q32010

Q32013

Y/Y

NI UK

Source: DFP & NOMIS

NI outperformed the UK in the early 1990s

but not in 2009

NI & UK service sectors post strong rates of jobs growth in Q3 2013. The 7th successive quarter of growth for NI

NI v UK Services Quarterly Employment Growth (Employee Jobs)

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013

Q/Q

NI UK

Source: DFP & NOMIS

Until recently NI’s service sector employment recovery has lagged significantly behind that of the UK

Service Sector Annual Employment Growth

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

Q3 1983 Q3 1989 Q3 1995 Q3 2001 Q3 2007 Q3 2013

Y/Y

NI UK

Source: DFP & NOMIS

NI outperformed the UK in the early 1990s but not now

NI lagging UK employment recovery

Apart from manufacturing, NI’s job losses have been more severe than in the UK

Employee jobs relative to pre-downturn peaksas of Q3 2013

-45%-40%-35%-30%-25%-20%-15%-10%-5%0%5%

Construction Manufacturing Services Total

NI UK Source: DFP & NOMIS

NI peak Q2 2008

NI peak Q2 2007

NI peak Q4 2007

NI peak Q2 2008

NI & UK Employee Jobs, RoI Employment

Full-Time & Part-Time

Employment boom was predominantly part-time jobs while employment gloom was largely for full-timers

NI Annual Employment GrowthFull-Time & Part-Time Employee Jobs

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Sep-93 Mar-96 Sep-98 Mar-01 Sep-03 Mar-06 Sep-08 Mar-11 Sep-13

Y/Y

Full-Time Part-Time Total

Source: DFP, Figures are not seasonally adjusted

Part-time employment growing at a much faster rate than full-time employment

Full-Time employment fell at a much faster rate than part-time

Recovery in Part-Time jobs

Surge in Full-Time employment

There are more part-time manufacturing jobs now than there were before the downturn

NI Employee jobs relative to pre-downturn peaksQ3 2013

-4.3%-1.2%

-45%

-35%

-25%

-15%

-5%

5%

15%

Manufacturing Construction Services Total*

Full-Time Part-Time

Source: DFP Unadjusted figures, * relative to September 2008

…leading to a change in NI’s employment mix

% of NI Employee Jobs Full-Time v Part-Time

25%

35%

45%

55%

65%

75%


Full-Time Part-Time

Full-time employment's share of total employment is falling

Part-time employment's share of total employment is rising

Source: DFP

Full-time employment's share rising again

In terms of full-time employment, NI outperformed the UK in the boom but until recently has lagged the UK recovery

NI & UK Full-Time Annual Employment Growth Employee Jobs

-6%

-4%

-2%

0%

2%

4%

6%


Y/Y

UK NI

Source: DFP & NOMIS

NI outperforming UK

NI’s full-time employment back to mid-2005 levels

NI Full-time & Part-time Employee Jobs Indexed Q1 1998 = 100

80

90

100

110

120

130

140

Sep-98 May-00 Jan-02 Sep-03 May-05 Jan-07 Sep-08 May-10 Jan-12 Sep-13

Index

FT PT

Source: DFP, figures are not seasonally adjusted

NI full-time employment still at mid-2005 levels

RoI is now experiencing the fastest rate of employment growth amongst full-time employees

Full-Time Annual Employment Growth Employee Jobs

2.2%

2.3%

3.8%

-15%

-10%

-5%

0%

5%

10%


Y/YUK NI RoI

Source: CSO, DFP & Nomis

RoI outperforming NI & UK during

Celtic Tiger boom

RoI underperforming NI & UK during Celtic Tiger bust

RoI largely outperformed the UK & NI in terms of part-time employment growth before during & after the downturn

Part-Time Annual Employment Growth Employee Jobs

2.2%

-0.6%

1.0%

-9%

-6%

-3%

0%

3%

6%

9%

12%

15%


Y/YUK NI RoI

Source: CSO, DFP & Nomis

RoI outperforming NI & UK during

Celtic Tiger boom

RoI still outperforming NI & UK during

Celtic Tiger bust & recovery

RoI’s rebound in Full-Time employment is due to the fact it is coming off extremely low levels

NI v UK v RoI Full-Time Employment Levels* Pre-Recession Peaks Indexed = 100

-5.5%

-2.3%

-18.5%

75

80

85

90

95

100

105

110

Peak Q2 1yr Q6 2yrs Q10 3yrs Q14 4yrs Q18 5yrs Q22 6yrsTime Since Pre-Recession Peak

Index

NI UK RoI Pre-Recession Peak

Source: ONS, CSO & DFP, *NI & UK unadjusted employee jobs

Since the downturn, part-time employment is almost 16% higher in the RoI and almost 2% higher in the UK

NI v UK v RoI Part-Time Employment Levels* Pre-Recession Peaks Indexed = 100

-2.3%

+1.6%

+15.6%

90

95

100

105

110

115

120

Peak Q2 1yr Q6 2yrs Q10 3yrs Q14 4yrs Q18 5yrs Q22 6yrsTime Since Pre-Recession Peak

Index

NI UK RoI Pre-Recession Peak

Source: ONS, CSO & DFP, *NI & UK unadjusted employee jobs

NI males and females have recouped some of the jobs lost during the downturn

NI Employee Jobs by gender & work pattern

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Full-time Part-time

All Full-time Part-time


All

Sep-08 to Sep-13 Trough relative to Sep-08 Recovery from trough

Source: DFP

Males Females All Employees

There are 2.9% more males in part-time employment than 5 years ago but 6% fewer full-time employees

NI Employee Jobs by gender & work pattern% Change September 2008 - September 2013

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Full-time Part-time



All

Source: DFP

Males Females All Employees

In terms of part-time employment, NI outperformed the UK in the first part of the downturn but lagged in the recovery

NI & UK Part-Time Annual Employment Growth Employee Jobs

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%


Y/Y

UK NI

Source: DFP & Nomis

Ulster Bank Northern Ireland Purchasing Managers Index (PMI)

Includes analysis of Global, Eurozone, UK, UK Regions, NI &

Republic of Ireland economic performance by sector

November 2013 Survey Update

Issued 9th

December 2013

Richard Ramsey

Chief Economist Northern Ireland

[email protected]

Twitter @UB_Economics

mailto:[email protected]

PMI SurveysPurchasing Managers’

Indexes (PMIs) are monthly surveys of private sector companies

which provide an advance indication of what is happening in the private sector economy

by tracking variables such as output, new orders, employment and

prices across different

sectors.

Index numbers are calculated from the percentages of respondents

reporting an

improvement, no change or decline on the previous month. These indices vary from 0 to

100 with readings of 50.0 signalling no change on the previous month. Readings above

50.0 signal an increase or improvement; readings below 50.0 signal a decline or

deterioration. The greater the divergence from 50.0 the greater

the rate of change

(expansion or contraction). The indices are seasonally adjusted

to take into consideration

expected variations for the time of year, such as summer shutdowns or holidays.

< 50.0 = Contraction 50.0 = No Change > 50.0 = Expansion

Data at a sector level are more volatile and 3‐month moving averages

have been used to

more accurately identify the broad trends.

UK, RoI & NI firms all experienced jobs growth in November albeit at a weaker rate than October

Private Sector Employment LevelsMonthly

30

35

40

45

50

55

60

Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13

NI UK RoI

Source: Markit Economics & Ulster Bank NI PMI

Job Gains

Job Losses

…with all sectors also reporting job gains over the last 3 months

NI PMI - Employment Index 3 month moving average

25

30

35

40

45

50

55

60

65

Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13

Manufacturing Services Construction


Job Gains

Job Losses

All the UK regions and the Republic of Ireland post employment growth in November …

Employment LevelsNovember 2013

50 = No change

54.8

51.2

55.5

46

48

50

52

54

56

58

60

Lon SW WM East SE UK NW Scot EM Wal NE NI Y&H RoI

PMI Index

IncreasingD

ecreasingSource: Markit Economics & Ulster Bank NI PMI

… and over the last 3 months to November

Employment Levels3 months to November 2013

50 = No change

54.7

51.9

55.3

44

46

48

50

52

54

56

58

Lon WM SW SE UK NW East Wal Scot NI EM Y&H NE RoI

PMI Index

IncreasingD

ecreasing


NI posts a marginal decline in employment with the West Midlands & RoI the sharpest rise over the last 12 months

Employment Levels12 months to November 2013

50 = No change

52.1

53.2

49.9

46

48

50

52

54

WM SE East Lon SW UK Scot Wal NW EM Y&H NE NI RoI

PMI Index

IncreasingD

ecreasing


Northern Ireland Quarterly Employment Survey (QES)

V Markit Economics / Ulster

Bank PMI

PMI signals further employment growth in Q4 2013

NI Employment: PMI v QES**

35

40

45

50

55

60

2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*

PMI Index

-1.5%

-1.3%

-1.0%

-0.8%

-0.5%

-0.3%

0.0%

0.3%

0.5%

0.8%

1.0%Q/Q

PMI Employment Index No Change QES Q/Q

**QES is DFP's official Quarterly Employment Survey of the number of jobs in NI & includes public sector

Discontinuity in QES Series

Job losses

Job gains

Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to average for October & November

Services PMI more negative than QES in recent quarters. PMI signals further job gains in Q4 2013

NI Services Employment: PMI v QES*

40

45

50

55

60

65

2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*

PMI Index

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

Q/Q



Job losses

Job gains

*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI and includes the public sector

Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to October & November average

Slide 69

Manufacturing PMI suggests further jobs growth in Q4

NI Manufacturing Employment: PMI v QES**

30

35

40

45

50

55

60

65

2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*

PMI Index

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Q/Q



Job losses

Job gains

**QES is DFP's official Quarterly Employment Survey of the number of jobs in NI firms


Slide 70

The PMI & official QES numbers have pointed to job losses throughout downturn. PMI suggests more growth in Q4 2013

NI Construction Employment: PMI v QES**

20

25

30

35

40

45

50

55

60

65

2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*

PMI Index

-10.0%

-7.5%

-5.0%

-2.5%

0.0%

2.5%

5.0%

Q/Q



Job losses

Job gains

**QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms


Unemployment

NI dole queue falls for the 10th month in a row

Slide 72

NI unemployment falling Claimant Count Monthly Change

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

May-07 Jun-08 Jul-09 Aug-10 Sep-11 Oct-12 Nov-13

M/M

Nov 2008

+3,200

Source: DFP

-4,700

…the overall dole queue set to fall back below 60,000

Slide 73

NI Unemployment Claimant Count Levels

60,200

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Nov-86 Nov-89 Nov-92 Nov-95 Nov-98 Nov-01 Nov-04 Nov-07 Nov-10 Nov-13

Source: DFP

Jan 2013 64,900 at

mid-1997 levels

Record low Aug 0723,600

Good Friday Agreement signed

April 199857,900

It’s been a ‘Mancession’, but there now appear to be more jobs for the boys

Slide 74

NI 12 Monthly Change in Claimant Count

-5,000

0

5,000

10,000

15,000

20,000

25,000

Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13

Male Female

Source: DFP, ONS

Male unemployment heading down towards 40,000

Slide 75

NI Claimant Count by Gender

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Nov-71 Nov-77 Nov-83 Nov-89 Nov-95 Nov-01 Nov-07 Nov-13

Male Female

Source: ONS, NOMIS

The number of claimants <25 years of age claiming the dole has been falling but is it due to employment of emigration?

Slide 76

Youth unemployment falls in November Claimant Count Monthly Change

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13

Source: DFPYouth unemployment figures are not seasonally adjusted. Therefore the spike in July

and fall in October is largely due to leaving school and starting education

No. of under 25s claiming the dole now at its lowest level since February 2009 & just 9% (1,254) above GFA levels

Slide 77

NI Youth Claimant Count Levels<25 years of age

Nov 07 low 7,050

15,399

0

5,000

10,000

15,000

20,000

25,000

Nov-97 Nov-99 Nov-01 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13

Source: DFP

19,551 Highest level since

October 1996

GFAApril 1998

14,145

But NI-UK unemployment differential is now wider than it was when the Good Friday Agreement was signed in Apr-98

Slide 78

NI-UK unemployment rate differential widening

6.7%

3.8%

0

1

2

3

4

5

6

7

8

Feb-98 May-00 Aug-02 Nov-04 Feb-07 May-09 Aug-11 Nov-13

%

NI UK

Source: ONS / DFP Claimant Count

2.9 pp

GFA Apr 19982.8 pp

NI has the highest unemployment rate of all the UK regions using the claimant count measure

Slide 79

Claimant Count Unemployment by UK RegionNovember 2013

3.8

6.7

6.1

2

3

4

5

6

7

SE SW East Lon EM UK Scot NW Wal WM Y&H NE NI

%Source: DFP & ONS, % of Workforce

Using ILO measure, NI’s headline rate is on a par with the UK. RoI’s unemployment rate now following a downward trend

Slide 80

UK, NI & RoI (ILO) Unemployment Rates

7.4%7.5%

12.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Oct-97 Oct-99 Oct-01 Oct-03 Oct-05 Oct-07 Oct-09 Oct-11 Oct-13

NI UK RoI

Source: ONS, Labour Force Survey & RoI Live Register

5 regions have a higher rate than NI using the ILO unemployment rate (Wales also 7.5%)

Slide 81

ILO Unemployment Rate August - October 2013

7.4% 7.5%

10.1%

0%

2%

4%

6%

8%

10%

12%

East SE SW EM Scot UK Wal NI NW Lon Y&H WM NE

Rate

Almost 1 in 4 of under 25’s in NI looking for work cannot find any

Slide 82

ILO Unemployment Rates by Age-GroupAugust - October 2013

0%

5%

10%

15%

20%

25%

18-24 25-49 50+ 16+Age Category

Source: DFP

NI has the 2nd highest youth unemployment rate in the UK

Slide 83

ILO Youth Unemployment Rate (18-24yr olds) August-October 2013

18.6%

23.8%25.2%

0%

5%

10%

15%

20%

25%

30%

SW SE East Wal NW EM Scot UK WM Y&H NE NI Lon

Rate

Source: ONS

NI’s current youth unemployment rate is > twice the rate that prevailed when the Good Friday Agreement was signed

Slide 84

Northern Ireland Youth Unemployment Rate (ILO)

Good Friday AgreementApr-98 10.6%

23.8%

0%

5%

10%

15%

20%

25%

Oct-95 Oct-98 Oct-01 Oct-04 Oct-07 Oct-10 Oct-13

Source: DFP Labour Force Survey (LFS)

NI has the lowest employment rate in the UK…

Slide 85

ILO Employment Rate (16-64yr olds) August - October 2013

67.0

72.0

60

65

70

75

80

NI NE NW WM Wal Lon Y&H UK Scot EM SW East SE

Employment Rate

…and the highest rate of economic inactivity

Slide 86

ILO Economic Inactivity Rate Rate (16-64yr olds) August - October 2013

22.1

27.4

15

20

25

30

SE East SW Scot EM UK Y&H Lon Wal WM NE NW NI

Rate %

Earnings

Median Gross Annual Earnings 2013 All Employees Full-Time

27,017

23,904

20,000

22,500

25,000

27,500

30,000

32,500

35,000

Lon SE East UK Scot SW EM WM NW Y&H Wal NE NI

£

Source: DFP & ONS ASHE

NI’s full-time employees have the lowest earnings of all the UK regions…

Median Gross Weekly Earnings 2013 All Employees Full-Time

517.5

460

400

450

500

550

600

650

700

Lon SE UK Scot East WM NW SW Y&H EM Wal NE NI

£ per wk

Source: DFP ASHE

…this is due to NI having the lowest private sector earnings for full-time employees of any UK region

Median Gross Weekly Earnings 2013 All Private Sector Employees Full-Time

490.1

402.5

250

300

350

400

450

500

550

600

650

700

Lon SE UK East Scot WM SW Y&H NW EM NE Wal NI

£ per wk

Source: DFP ASHE

Since the GFA, the gap between NI-UK median wages for full- time employees has narrowed for women but widened for men

Slide 90

NI Median Full-Time Earnings as a % of UK

86

96

89

80

85

90

95

100

1997 1999 2001 2003 2005 2007 2009 2011 2013

% Men Women All

Source: DFP Annual Survey of Household Earnings (ASHE) 2013

GFA signed April 1998

In NI, the rate of inflation has outpaced earnings growth for most individuals

% Change in N.Ireland Median Wages v UK InflationCumulative Increase 2007-2013*

0%

5%

10%

15%

20%

25%

30%

Total Public Private Total Public Private CPI RPI

All Employees Full-Time Employees Only Inflation

Source: DFP ASHE & ONS, * April each year

After inflation the median private sector wage has fallen by almost 20% in real terms (after CPI inflation)

% Change in N.Ireland Median Wages in Real Terms Cumulative Increase 2007-2013*

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Total Public Private Total Public Private

All Employees (Full-Time & Part-Time) Full-Time Employees Only

Source: DFP ASHE & ONS, * April each year

Those aged under 30 years of age have median earnings below the NI average…

NI Annual Median Gross Pay By Age-GroupFull-Time Employees 2013

17.5

0

5

10

15

20

25

30

Age 18-21 Age 22-29 Age 30-39 Age 40-49 Age 50-59 Age 60+

£000

Source: DFP ASHE, April 2013 NI Average for all age-groups

… & those under 40 (including the household formation 25-34 yrs category) have experienced the biggest falls in real earnings

NI Gross Median Wages for Full-Time Employees Cumulative Change in Real Terms 2007-2013*

-6.3%

-25%

-20%

-15%

-10%

-5%

0%

Age 18-21 Age 22-29 Age 30-39 Age 40-49 Age 50-59 Age 60+

Source: DFP ASHE & ONS, *using CPI inflation in April each year

NI average change for employees from all age-groups

Slide 95

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Northern Ireland Labour Market Slide Pack - December 2013