Northern Ireland’s unemployment rate has dropped below 2% for the first time, according to official government figures. The latest NI seasonally adjusted unemployment rate (the proportion of economically active people aged 16 and over who were unemployed) for the period April-June 2024 sits at 1.9%.
Meanwhile NI’s private sector continued to grow in July and may have performed better than the UK average, according to the latest Ulster Bank NI Growth Tracker survey.
Every month the bank surveys a representative sample of local businesses.
It indicates that the NI private sector has grown throughout 2024 and in July new orders were up markedly while inflation showed continued signs of easing.
New orders were up markedly, while firms took on extra staff to the greatest extent since April 2023 as backlogs of work accumulated. Meanwhile, rates of inflation showed signs of easing.
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“The Northern Ireland private sector started the second half of the year in a similar vein to how it ended the first, with marked improvements in output and new orders. In fact, the expansion in business activity in Northern Ireland was the strongest of all the UK regions and nations covered by the report.
“Delving into the different sectors however shows that the picture isn’t overwhelmingly positive. Growth was driven by the manufacturing and services categories, while the retail and construction sectors were less buoyant.
“There were widespread increases in employment as companies responded to greater workloads, with service providers ramping up staffing levels to an extent unseen for nearly 17 years. That said, companies across the private sector saw outstanding business expand again, suggesting that employment and output will need to be raised further in the months ahead to try and keep on top of workloads.
“More good news for firms in Northern Ireland was that the ramping up of demand in the private sector has not been accompanied by building inflationary pressures. On the contrary, both input costs and selling prices rose at weaker rates in July.
“While nothing should be taken for granted, everything seems set up for firms to have a successful second half of 2024.”
The main findings of the July survey were as follows:
The headline Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s private sector – posted 54.9 in July to signal a further marked increase in output. This was despite the reading dropping from 55.8 in June. The expansion in output in Northern Ireland was the sharpest of the 12 UK regions and nations covered by the report. Where activity increased, panellists generally linked this to higher new orders. Three of the four monitored sectors saw activity rise, the only exception being construction.
New business increased for the seventh consecutive month and at a sharp pace that was stronger than the average across the UK as a whole. Companies expect continued increases in new orders over the coming year to support growth of output. As a result, business sentiment remained elevated, with almost 38% of respondents predicting a rise in activity over the next 12 months. Marked increases in new orders led companies to expand employment for the nineteenth month running in July. Moreover, the rate of job creation was solid and the most marked since April 2023. The rise in staffing levels in Northern Ireland was the fastest of all UK regions and nations covered. Despite this expansion in operating capacity, the strength of new order growth meant that backlogs of work continued to build at the start of the third quarter.
Input prices continued to rise sharply as the second half of the year got underway, although the pace of inflation eased to a five-month low and was softer than the series average. In a similar vein to that seen for input costs, output prices increased at a softer pace in July. Charges rose solidly, albeit at the slowest pace since January.