Mixed signals from the NI Labour Market

Posted on April 16, 2014 by Paul Mac Flynn

As with buses, in Northern Ireland you wait and wait for economic statistics and then two come at once. Today the figures for the Northern Ireland Composite Economic Index were released. The NICEI is the latest attempt by statisticians to come up with a figure for economic growth in Northern Ireland. Today we learnt that in the final quarter of 2013 growth was +0.6%, marginally below the +0.7% recorded for the UK for the same period. The main increase came from the services sector, while the main decrease came from construction. There is nothing particularly surprising in these figures, it more or less confirms trends most of us are aware of. The main point to take from these figures is that while UK GDP is now 1.5% below where is it was before the recession, Northern Ireland is still 11.2% below its peak. All growth is welcome, but Northern Ireland has some way to go and we would want to pick up the pace.

The second release of statistics was for the labour market. The Labour Force Survey measure of unemployment increased from 63,000 to 68,000 or from 7.3% to 7.7% in the three months ending February of this year. However, the latest statistics were also released for the Claimant Count which showed the 14th consecutive monthly fall in that measure of unemployment. At first it may appear that these two statistics are entirely contradictory, but they are both very different measures.

The Labour Force Survey measures unemployment based on a sample of the population which is weighted to reflect the true population. It is a survey subject to sample error, but it also measures unemployment using the ILO agreed definition which is someone:
- without a job, that wants a job, has actively been looking for work in the last 4 weeks and are available to start in the next 2 weeks
- not in work, that has found a job and is waiting to start in the next 2 weeks.

The Claimant Count is very different, it is administrative record of all people claiming unemployment benefit from centres across Northern Ireland. It may be easy to conclude that the claimant count is more accurate because it is counts an actual population whereas the LFS is a survey. However there are important differences. Not everyone who is unemployed is entitled to claim benefits, such as those with a partner in employment or students looking for part-time work. More importantly though the LFS unemployment measures those aged 16 and over, but those aged 16-18 can only claim unemployment related benefits in certain circumstances.

Neither of these measures of unemployment is perfect, and both should be used when assessing the health of the labour market. However it is best to always be cognisant of what the statistics is measuring. While there are reasons to celebrate a decreasing claimant count, the LFS reminds us that the real situation is not always that clear.

Posted in: JobsNorthern Ireland

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