Economists wrong about dole peak

Oxford Economics - the authors of ILEX’s ‘Londonderry - Today and Tomorrow (2010)’ report - last year estimated that the unemployment rate would peak at around 8 per cent in 2011, however, the local rate - the highest in Northern Ireland - rose to 8.2 per cent in August.

Londonderry was one of three districts showing the highest percentage increase over the year. Back in September 2010 the rate was 7.7 per cent. That’s since risen by 0.5 percentage points to 8.2 per cent.

The figures are detailed in the latest labour market report published by the Enterprise Minister Arlene Foster.

The new labour market report states: “The highest rates he highest rates at August 2011 were in Derry (8.2 per cent), Belfast (7.2 per cent), Limavady (7.1 per cent) and Strabane (7.0 per cent).

“Those that showed the highest percentage increase in levels over the year to August 2011 were Ards (10.2 per cent), Derry (8.2 per cent) and Craigavon (6.9 per cent).”

The new statistics reveal a more dire picture than that contained in last year’s ‘Today and Tomorrow’ report, which stated: “Over the decade to 2008, Derry~Londonderry’s claimant unemployment rate halved to under 5 per cent. “However it remained significantly above the NI average. The recession has reversed much, though notably not all of the recent unemployment falls.

“We estimate unemployment rates to peak in 2011 at around 8 per cent compared to 5.3 per cent for NI (unemployment currently stands at 7.7 per cent in Derry~Londonderry in September 2010).”

Last year’s report did, however, allow for a higher peak than 8 per cent noting that the latest claimant unemployment data prior to the paper’s publication in autumn 2010 suggested peaks for both the city’s and NI’s unemployment rates could be even higher.

The report continued: “Although we expect the labour market to start to recover in 2012/2013, unemployment rates are likely to remain above recent lows over the forecast period given the subdued rates of employment growth and mis-match of skills demanded and supplied through the recovery phase.

“There is therefore a need for the Regeneration Strategy to include initiatives aimed at uplifting and matching skill levels within the area.”

Figures for Northern Ireland as a whole for August 2011 show that the number of unemployment benefit claimants increased by 100 from the previous month’s revised figure.

The total number of employee jobs in Northern Ireland was estimated at 699,650 for June 2011, representing a fall of 1,830 over the quarter.

Commenting on the figures, Enterprise Minister Arlene Foster said: “Difficult trading conditions in the world economy continue to make it extremely hard to tackle rising unemployment rates.

“We are focused on stimulating private sector growth to create more jobs and encourage export opportunities. I have already outlined plans to help rebuild the economy in Northern Ireland through the Short Term Employment Scheme (STES).

“The Executive has given Invest Northern Ireland a budget of £19million which is being targeted at the creation of 4,000 new jobs by 2014.”

The Minister said that since STES was launched in April of this year, Invest NI has been actively promoting the benefits of the scheme to a wide range of key stakeholders and businesses across Northern Ireland to encourage them to bring forward employment based projects.

Arlene Foster added: “It is very encouraging that a number of these negotiations are at an advanced stage and I am confident that we will be in a position to make several very positive announcements in the near future.

“I would also call on any other eligible businesses, large or small, that would benefit from the support available to increase employment, to speak to Invest NI immediately.

“As well as providing employment grant support for new job creation, STES also includes a number of initiatives to incentivise new business start-up activity by individuals who are resident in Neighbourhood Renewal Areas and by young people (16-24) who are not in education, employment or training. While it will take time for these new businesses to develop, a significant amount of work is underway to increase awareness and I am encouraged by the early signs.”