RECORD LOW UNEMPLOYMENT in Northern Ireland is a positive step – but the region still has a high proportion of adults who are “economically inactive”, an economist has said.

Northern Ireland’s unemployment rate between April and June was around 1.9%, the lowest it has ever recorded.

It marked a decrease over the last year of 0.7%.

However, there are still concerns over the number of people who are “economically inactive”, which will be a concern for businesses trying to recruit workers in the future, said Senior Economist at Ulster University Anastasia Desmond.

The unemployment rate counts people who are unemployed but are seeking a job, while the economically inactive rate counts those who are unemployed and not seeking employment. 

The economically inactive group includes both adults who are not looking to be employed and those who may not be able to work for reasons such as education commitments, disability or retirement (between ages 16 and 64).

The new figures released by the Northern Ireland Statistics and Research Agency showed there were 807,700 PAYE workers employed in Northern Ireland as of July 2024, a 2.3% increase over the last year. Employees had a median monthly pay of £2,249 in July 2024, an increase of £164 (7.9%) on last year. 

The employment rate – that is, the proportion of people aged 16 to 64 in work – increased by 1.2% over the year to 71.6%.

The economic inactivity rate, which is the proportion of people aged 16 to 64 who were not working and not seeking or available to work, increased by 0.5% over the quarter and decreased by 0.7% over the year to 27.1%.

Speaking to The Journal, Desmond said it is a positive that the unemployment rate in Northern Ireland has fallen below 2%.

“It shows that people who want jobs are able to get them, which is very positive.
We’re always going to have a certain level of unemployment between people changing jobs, so it’s not a realistic expectation to get that ever down to zero, but having that lower rate means that people who are searching for jobs are able to find them. That indicates a healthy labour market,” she said.

Desmond attributed growth in employment to strong economic growth after the Covid-19 pandemic and better government supports compared to what was seen in the 2010s in the wake of the financial crisis.

She said that a low rate of permanent layoffs during the pandemic means that businesses that are now trying to expand and recruit more workers are recruiting from a smaller pool of people, which means that people who are looking for a job or to change to a new field or sector have more opportunities available to them.

However, Desmond cautioned that there is also a high proportion of people who are economically inactive.

“What we’ve got at the minute is a record unemployment number but we haven’t got a record employment number. It’s not quite matching up – those people aren’t going directly from unemployment into employment. There’s some of them who are joining the pool of being economically inactive,” Desmond outlined.

“What we would really want to see is, while that unemployment number is coming down, we’d also look for those employment numbers to be really pushing upwards. But what we’re seeing is we’ve still got a really big, quite stagnant pool of people who are economically inactive in Northern Ireland,” she said.

That’s certainly more worrying for policymakers and for businesses when they think about where their labour supply is going to come from in the future.

“If we’ve got a really small pool of people to draw from, how are they going to access talent in the future if they continue to grow and expand their businesses?”

Desmond said that a solution will need to involve helping people in the economically inactive group to overcome any barriers that they are facing in joining or returning to employment. 

“It’s about making sure they’ve got the right skills and qualifications to meet the jobs that the labour market is requiring today and making sure that they’ve got the experience and training behind them to get back into the labour market, but also stay in the labour market as well so they’re not swinging backwards and forwards between economic inactivity, unemployment and employment,” Desmond said.