Robust NI Labour Market
2018, like 2016 & 2017, has been the year for record highs and lows in the Northern Ireland labour market. The first quarter saw the local unemployment rate hit a record low of 3.1% with the latest figure for the three months to November 2018 slightly higher at 3.4%. Meanwhile, the latest Quarterly Employment Survey (QES) revealed a record number of jobs (765,880) in Q3. That’s the tenth consecutive quarter of ‘record highs’.
Despite a significant reduction in public sector employment, there are now 33,000 more jobs (+4.5%) in the NI labour market than existed in Q2 2008 (the pre-recession peak). Both the services and manufacturing sectors have recovered the jobs lost during the downturn. Services boast a record high in job numbers while manufacturing employment is at a 14-year high. Construction may be enjoying the fastest rates of growth (+4.1% y/y) but employment within this sector remains just over three-quarters of where it was over a decade ago.
Encouragingly, the rate of overall employment growth has shown no notable signs of slowing with the annual pace of job creation running at a healthy 2.0% y/y. This conceals stronger rates of growth in the private sector (+2.5% y/y) relative to the public sector (+0.6% y/y).
Northern Ireland’s private sector has been growing continuously for 17 quarters (since June 2014). Over that period private industry has generated a net gain of 77,000 jobs (+16%). That’s an average of 4,500 jobs per quarter over the last four-and-a-bit years.
Strong Demand from Employers
As far as vacancies are concerned, the Northern Ireland labour market ended the year the way it began, with strong demand from employers. The latest NIJobs.com Jobs Report for Q4 2018 reveals a plentiful supply of job vacancies in Northern Ireland across a wide range of disciplines.
Indeed four of the 32 employment categories posted their highest numbers of listings to date. The number of vacancies may have eased relative to Q3’s record high but listings are still up over one-fifth (22%) year-on-year and have increased by 40% in three years.
Key Highlights for Q4
– IT remains the sector advertising the most vacancies
– The number of IT vacancies more than doubled year-on-year in Q4 and now account for more than one-in-seven of all listings
– After IT, the Hospitality and Social, Charity & Not for Profit sectors posted the largest number of job vacancies
– Four of the 32 employment categories hit record highs
– Record highs were recorded in the following categories:
o IT
o Big Data & Analytics
o Science, Agriculture, Pharmaceutical & Food
o Legal
– The Nursing, Healthcare & Medical category saw vacancies fall to a new low. Meanwhile, listings within Transport, Logistics & Warehousing posted a sizeable 42% fall from Q3’s record high to an 11-quarter low. Secretarial & Admin also saw vacancies slip to their lowest level in almost three years.
– Despite a slight fall from Q3’s record high, overall listings have risen by over one-fifth (22%) in 1 year and by 40% in 3 years.
– The top five categories account for over 45% of all listings
2019: a year of growth, consolidation or decline?
2019 is likely to be more challenging for the jobs market with a global economic slowdown and Brexit to contend with. Clearly, some sectors are more exposed to these two issues than others.
One of the most ‘Brexit-proof’ sectors has been the IT sector. This continues to go from strength-to-strength with job vacancies more than doubling over the last year to a fresh record high. IT listings now account for more than one-in-seven of all job vacancies. Allied to IT is the growing niche area that is Big Data & Analytics. These sectors are expected to continue on their growth trajectory and are sectors worth watching in 2019. Filling these vacancies will be a challenge with growing skills shortages in NI, GB and the Republic of Ireland making retaining talent a priority issue in 2019.
Production, Manufacturing and Materials saw the number of vacancies ease in Q4 relative to its recent highs. Nevertheless, the demand for labour remains strong. The global slowdown is likely to dampen economic prospects in 2019. That said, ongoing skills shortages coupled with the need to replace EU-27 nationals leaving these shores, should provide a significant source of employment opportunities in 2019.
Construction, Architecture & Property saw a notable pick-up in demand over the quarter (+19%) and year-on-year (+59%). 2019 is set to be a much more challenging year with a number of surveys pointing to mounting pessimism in the sector. This is largely linked to the lack of a Northern Ireland Executive/decision-making holding up large public-sector investments. Prospects for firms operating in Great Britain and the Republic of Ireland are brighter. The ‘3 H’s’ (Heathrow airport, Hinkley Point Power Station & the HS2 rail link) are a major boost to the construction sector in GB.
Accountancy & Finance and Engineering together account for almost one-in-seven of all vacancies. Both of these sectors have performed strongly in 2018. Engineering, like the wider manufacturing sector, faces the challenges of uncertainty over Brexit and the slowdown in the global economy. Like manufacturing, there is a risk of severe supply-side disruption resulting from a ‘No-deal Brexit’. Other sectors particularly exposed to Brexit include Transport, Logistics & Warehousing and Science, Agriculture, Pharmaceutical & Food. The latter a record number of job adverts in Q4.
One of the key beneficiaries of the Brexit is the legal industry. The sector posted a record number of vacancies in Q4. The complexity of Brexit will keep demand strong for legal services in 2019.
Richard Ramsey is Chief Economist, Northern Ireland, at Ulster Bank. In addition to providing regular analysis internally at the bank, Richard is a frequent economic commentator in the media and a regular columnist in newspapers Northern Ireland. You can read more from Richard on his blog Ulster Economix.