Northern Ireland Labour Market Slide Pack - December 2013

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A PowerPoint slide pack highlighting Northern Ireland's labour market trends is attached for your information. It follows last week's Quarterly Employment Survey which revealed that Northern Ireland posted its 7th successive quarterly rise in employment with all sectors of the economy recording positive growth. It is noted that Northern Ireland has now recouped over one-quarter of the jobs lost during the downturn. Furthermore, last week it was also revealed that NI's unemployment register, or claimant count, fell for the 10th consecutive month in November. The slide pack includes NI v UK employment performance by sector and analysis of full-time & part-time employment trends. The table of contents and a few pertinent charts are also highlighted below.

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Northern Ireland Labour Market Slide Pack - December 2013

  1. 1. Northern Ireland Labour Market Update Issued 23rd December 2013 Richard Ramsey Chief Economist Northern Ireland richard.ramsey@ulsterbankcm.com Twitter: @UB_Economics
  2. 2. Contents Slide Numbers 1. Labour Market Summary 3-4 2. Workforce Jobs – (including NI & UK comparisons) 5-9 2. NI Quarterly Employment Survey – (including sector performance) 10-20 3. NI’s Job Losses, Recovery & Current Position - 21-24 4. NI’s ‘Employment Recessions’ & Recoveries Compared (including sector performance) 1980s v 1990s v 2007/08 - 2013 (includes sector performance) 25-29 5. NI Public & Private Sector Employee Performance 30-35 6. NI v UK Employee Job Performance - (including sector performance) 36-45 7. NI v UK Full-Time & Part-Time Employment Performance 46-58 8. Ulster Bank PMI Employment Performance 59-70 9. Unemployment Trends (includes claimant count & Labour Force Survey) 71-86 10. Earnings (includes analysis from NI Annual Survey of Hours & Earnings 2013) 87-94
  3. 3. NI Labour Market Summary (1) NI’s total workforce jobs increased by 0.7%, or +5,300 jobs, over the year to June 2013. This took the total number of workforce jobs (includes employees & self employed) to 808,900 jobs in June 2013. This is 49,300 (-5.7%) below NI’s peak in June 2008. By comparison, UK workforce jobs in June 2013 were just 0.1% below their pre-downturn peak. NI recorded its 7th consecutive quarterly rise in Q3 2013 according to the latest Quarterly Employment Survey (QES). There were 3,300 jobs created in Q3 alone and a cumulative net gain of 11,400 jobs during the last 7 quarters. The latter represents over one quarter of the jobs lost during the downturn. All NI sectors posted employment growth in Q3 2013 with construction posting only its 2nd quarterly gain since Q4 2007. Despite this increase, NI’s construction employment remains almost 37% below its pre-downturn peak. Construction / property related sectors have posted the steepest job losses over the last 5 years. Full-time employees have borne the brunt of the job losses in the UK, NI and the Republic of Ireland (RoI). However, all three economies saw the rate of job creation accelerate in Q3 2013. The RoI and the UK posted year-on-year increases of 3.8% and 2.2% respectively. Meanwhile full-time employment in NI increased by 8,810, or 2.3%, over the year to Q3 2013. This represented the fastest rate of employment growth since Q1 2008. Despite this recent rise, the number of full-time jobs in NI in Q3 2013 remains 4.3% (or 20,410 jobs) below the corresponding figure in Q3 2008 and 5.5% (26,530) below the peak recorded in Q1 2008. The Ulster Bank PMI suggests that NI will record further employment growth, across all sectors, in Q4 2013. NI’s claimant count, or dole queue, fell for the 10th successive month in November 2013 to 60,200. This represents a cumulative fall of 4,700 relative to NI’s claimant count peak of 64,900 in January 2013. NI has the highest claimant count unemployment rate of all the UK regions at 6.7% (UK = 3.8%). The NI-UK unemployment differential (2.9 percentage points) is now wider than it was when the Good Friday Agreement was signed back in April 1998.
  4. 4. NI Labour Market Summary (2) Using the ILO unemployment measure, NI’s unemployment rate in the three months to October 2013 stood at 7.5%. This compares with 12.7% for the Republic of Ireland and 7.4% for the UK. NI’s relatively low ILO unemployment rate, when comparing with the UK average, is due to the high levels of economic inactivity. NI continues to have the highest rates of economic inactivity within the UK (27.4%). This has the effect of lowering NI’s headline unemployment rate as there is ‘hidden unemployment’ within the economically inactive. Furthermore, at 67.0%, NI has the lowest employment rate of all the UK regions (UK = 72.0%). Using the ILO unemployment measure it is noted that NI has the 2nd highest rate of youth unemployment (after London) within the UK. NI’s unemployment rate for 18-24year-olds currently stands at 23.8%. This compares with 18.6% for the UK as a whole. NI’s youth unemployment rate is more than twice the rate that prevailed when the Good Friday Agreement was signed. NI has the lowest median gross annual earnings of all the UK regions. According to the latest Annual Survey of Hours and Earnings 2013, NI’s gross annual earnings for all full-time employees stood at £23,904. This was some 11.5% lower than the UK average of just over £27,000. NI’s low annual earnings are due to below average earnings within the private sector. NI’s gross weekly earnings for full time employees within the private sector are some 18% below the equivalent figure in the UK. Since the Good Friday Agreement was signed in April 1998, the gap between the NI-UK median wages for full-time employees has narrowed for women but widened for men. The rate of inflation has outpaced earnings growth for most individuals since the recession began in 2008. After inflation, the median private sector wage for all employees (full-time & part-time) has fallen by almost 20%. Meanwhile the corresponding figure for the public sector has increased by almost 6%. Those individuals aged under 40 years have experienced the biggest falls in real earnings between 2008-2013.
  5. 5. Workforce Jobs Employee Jobs + Government Supported Trainees + Self-employed
  6. 6. 49,300 fewer workforce jobs in June 2013 relative to June 2008 – a fall of 5.7% NI Workforce in Employment Jobs (Employee Jobs + Self Employment + Govt supported trainees) 900,000 858.2k Source: DFP, jobs in June of each year 808.9k 850,000 803.6k 800,000 750,000 700,000 650,000 600,000 550,000 500,000 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
  7. 7. 14,200 fewer self-employed jobs in June 2013 relative to June 2008 – a fall of 11.6% NI Self-Employment Jobs 150,000 Source: DFP, jobs in June of each year 140,000 130,000 122.2k 120,000 108k 110,000 100,000 90,000 80,000 70,000 60,000 50,000 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
  8. 8. NI has not experienced the jobs recovery that has occurred within the UK but is now playing catch-up Y/Y NI & UK Workforce Jobs Annual % Growth 6% NI UK 4% 2% 0% -2% -4% Source: DFP & NOMIS, jobs in June of each year -6% 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
  9. 9. UK workforce jobs are just 0.1% below their June 2008 peak whereas NI is 5.7% below its pre-downturn peak NI & UK Workforce Jobs (as of June 2013) 3% Source: DFP & NOMIS, June annual figures 2% 1% 0% -1% -2% -3% -4% -5% -6% NI UK -7% June 2008 Peak to Trough Recovery from Trough Net Position Relative to June 2008 Peak
  10. 10. Quarterly Employment Survey (QES) QES is an employer survey (@ 5,500 companies) that measures the actual number of jobs (employees in employment) as opposed to the number of individuals in employment (as in the Labour Force Survey). The QES excludes the self-employed but is the preferred measure of employment within Northern Ireland
  11. 11. Summary Table – Quarterly Employment Survey Northern Ireland Employees Jobs (Seasonally Adjusted) Construction Services Manufacturing Total  Public* Private* 2007 Q1 43,460 567,160 83,870 715,550 220,250 495,180 Q2 44,710 571,080 84,070 720,760 220,730 500,310 Q3 45,320 575,090 83,940 725,420 219,370 506,240 Q4 46,820 578,880 83,470 729,340 219,780 509,100 2008 Q1 45,860 582,950 83,750 732,690 219,880 512,820 Q2 44,860 584,490 83,350 733,070 218,440 515,020 Q3 43,500 581,240 82,220 727,400 216,100 511,290 Q4 41,670 579,540 80,130 721,370 224,100 496,970 2009 Q1 39,420 577,730 78,230 715,340 224,460 490,920 Q2 38,210 577,080 75,290 710,490 225,030 485,690 Q3 36,780 577,450 74,010 ↑    Old Series    ↑ 708,030 225,390 482,510 ↑    Old Series    ↑ DISCONTINUITY IN DATA SERIES ↓    New Series   ↓ ↑    Old Series    ↑ DISCONTINUITY IN DATA SERIES ↓    New Series   ↓ DISCONTINUITY IN DATA SERIES ↓    New Series   ↓ Q4 37,120 580,970 73,330 711,250 225,010 486,100 2010 Q1 36,960 579,810 73,150 709,760 486,340 Q2 36,200 579,080 73,030 707,930 223,560 , 221,790 Q3 35,790 576,250 72,930 704,770 219,630 484,920 Q4 33,610 573,540 73,850 700,830 219,330 481,470 2011 Q1 33,370 573,340 73,690 700,250 216,810 480,510 Q2 32,780 697,240 216,810 480,510 32,930 570,770 , 569,060 73,430 Q3 73,750 695,750 215,340 480,150 Q4 31,640 564,690 75,490 691,620 214,090 477,560 2012 Q1 31,480 565,630 74,820 691,750 214,430 477,490 486,290 Q2 31,360 566,100 75,240 693,320 213,830 479,530 Q3  31,020 567,840 74,990 694,390 214,030 480,070 Q4 29,820 569,960 74,340 694,720 214,500 480,270 2013 Q1 29,630 570,840 74,470 695,440 214,680 480,880 Q2 29,400 574,030 75,670 699,720 215,170 484,530 Q3  29,720 576,230 76,370 703,020 215,130 487,640 Latest Quarter Q/Q % Change 1.1% 0.4% 0.9% 0.5% 0.0% 0.6% Latest Quarter Y/Y % Change ‐4.2% 1.5% 1.8% 1.2% 0.5% 1.6% Fall from peak ‐ Nos ‐17,100 ‐8,260 ‐7,700 ‐30,050 ‐5,600 ‐27,380 Fall from peak % Change ‐36.5% ‐1.4% ‐9.2% ‐4.1% ‐2.5% ‐5.3% Source: DFP, *Public & Private splits may not sum to total,** includes transfer of part‐nationalised financial institutions from private to public sector. Peak to trough fall does not strictly use comparable data and is indicative only
  12. 12. NI posts its second largest quarterly increase (+3,300) in over 5 years (Q4 2009 represents start of new series & therefore not a Q/Q rise) NI Employee Jobs Quarterly Change Nos Excludes self-employed 6000 +11,400 Discontinuity in Series 4000 2000 0 -2000 -4000 19,630 -6000 25,040 -8000 Source: DFP Q3 2006 Q1 2008 Q3 2009 Q3 2010 Q1 2012 Q3 2013
  13. 13. NI posts its 7th consecutive quarterly rise in Q3 2013 of 0.5% or 3,300 jobs (Q4 2009 represents start of new series & therefore not a Q/Q rise) NI Employee Jobs Excludes Self-Employed Q/Q % Change 1.0% 0.8% Q/Q Y/Y Y/Y % Change 3% Discontinuity in Series 0.6% 2% 0.4% 1% 0.2% 0% 0.0% -0.2% -1% -0.4% -2% -0.6% -3% -0.8% -1.0% Source: DFP Q3 Q2 Q1 Q4 Q3 Q4 Q3 Q2 Q1 Q4 Q3 2006 2007 2008 2008 2009 2009 2010 2011 2012 2012 2013 -4%
  14. 14. Current employment levels back at late-2005 levels Northern Ireland Employee Jobs 750,000 733,070 703,020 700,000 Discontinuity in Series 650,000 613,250 Q2 1998 600,000 550,000 Source: DFP 500,000 Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013
  15. 15. Service sector posts its 7th consecutive quarterly rise NI Services Employee Jobs Quarterly Change Excludes self-employed Nos 6,000 Discontinuity in Series +11,540 4,000 2,000 0 -2,000 -4,000 -16,280 -7,410 -6,000 Source: DFP -8,000 Q2 2007 Q1 2008 Q4 2008 Q3 2009 Q4 2009 Q3 2010 Q2 2011 Q1 2012 Q4 2012 Q3 2013
  16. 16. Service sector employment is back to late-2007 levels Northern Ireland Services Employee Jobs 625,000 584,490 574,030 575,000 Discontinuity in Series 525,000 475,000 Q2 1998 454,990 425,000 Source: DFP 375,000 Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013
  17. 17. Manufacturing employment posts its third successive quarterly increase 0.9% q/q (700 jobs) in Q3 2013 NI Manufacturing Employee Jobs Quarterly Change (Excludes self-employed) Nos 2,000 1,500 Discontinuity in Series 1,000 -9,740 500 0 -500 -1,000 -1,500 -2,000 -2,500 -3,000 Source: DFP Q2 2007 Q1 2008 Q4 2008 Q3 2009 Q4 2009 Q3 2010 Q2 2011 Q1 2012 Q4 2012 Q3 2013
  18. 18. Manufacturing employment is now at its highest level since Q1 2009 after the long-term trend of job losses NI Manufacturing Employee Jobs Levels 120,000 104,940 (Q3 1998 just after GFA) 110,000 100,000 90,000 84,070 Q2 2007 80,000 76,370 70,000 Discontinuity in Series 60,000 Source: DFP 50,000 Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013
  19. 19. Construction sector posts only its second quarter of employment growth since Q4 2007 NI Construction Employee Jobs Quarterly Change (Excludes self-employed) Nos 2,000 1,500 1,000 Discontinuity in Series +320 500 -10,040 0 -500 -1,000 -1,500 -2,000 Source: DFP 3 20 13 13 Q 3 Q 3 Q 1 20 12 20 12 20 11 Q Q 3 20 20 1 Q 3 Q 1 Q 11 10 20 10 20 09 Q 3 20 1 Q 3 Q 1 Q 20 08 20 08 20 07 20 3 Q 09 -2,500
  20. 20. Construction employment back to Good Friday Agreement (1998) levels NI Construction Employee Jobs Levels 50,000 46,820 45,000 40,000 35,000 Discontinuity in Series 29,720 30,000 Back to 1998 levels 25,000 Source: DFP, QES 20,000 Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013
  21. 21. Northern Ireland’s Job losses, recovery and current (net) position 2007/08-2013
  22. 22. All sectors have now shown some signs of recovery Northern Ireland Employment (Employee Jobs) 10% Peak to Trough Recovery from Trough Q3 2013 Relative to Peak 0% -10% -20% -30% Source: DFP, QES -40% All Sectors Services Manufacturing Construction
  23. 23. Utilities post largest annual % gain over the last year whilst construction records the biggest decline Northern Ireland Employment Change (Ranked by % change) September 2012 ‐ September 2013 Broad Industrial Group Utilities, Admin, Manufacturing, ICT & tourism related sectors Construction / property related Net Job Change % Change Year‐on‐Year Risers Electricity, gas, steam & air conditioning supply Administrative & support service activities Professional, scientific & technical activities Information & communication Real estate activities Human health & social work activities Manufacturing Accomodation & food service activities Transport & storage Other service activities Wholesale & retail trade; repair of motor vehicles Agriculture, forestry & fishing Mining & quarrying Year‐on‐Year Fallers Public administration & defence; social security Arts, entertainment & recreation Education Water supply, sewerage, waste management  Financial & insurance activities Construction ‐130 ‐40 ‐260 ‐40 ‐730 ‐1,300 ‐0.2% ‐0.3% ‐0.4% ‐0.8% ‐3.8% ‐4.2% Total 8,810 1.3% ↑↑↑ 180 2,850 1,570 940 300 2,360 1,390 700 160 90 780 10 0 12.6% 6.8% 6.6% 5.9% 4.2% 2.0% 1.8% 1.7% 0.7% 0.7% 0.6% 0.1% 0.0% Utilities, Admin, Manufacturing, ICT & tourism related sectors ↓↓↓ Source: DFP ‐ Quarterly Employment Survey (Seasonally Unadjusted), Excludes self‐employed Construction / property related
  24. 24. Property related sectors & manufacturing have seen the biggest job losses over the last 5 years Northern Ireland Employment Change (Ranked by % change) September 2008 ‐ September 2013 Broad Industrial Group Utilities, Real Estate, Entertainment & Agriculture Construction / property related Net Job Change % Change ↑↑↑ Year‐on‐Year Risers Electricity, gas, steam & air conditioning supply Real estate activities Arts, entertainment & recreation Professional, scientific & technical activities Agriculture, forestry & fishing Human health & social work activities Administrative & support service activities Information & communication Other service activities Year‐on‐Year Fallers Education Accomodation & food service activities Public administration & defence; social security Wholesale & retail trade; repair of motor vehicles Transport & storage Water supply, sewerage, waste management  Manufacturing Financial & insurance activities Mining & quarrying Construction ‐440 ‐840 ‐2,680 ‐6,110 ‐1,280 ‐250 ‐5,930 ‐1,830 ‐470 ‐13,780 ‐0.7% ‐1.9% ‐4.6% ‐4.7% ‐5.0% ‐5.1% ‐7.2% ‐9.1% ‐22.0% ‐31.7% Total ‐23,340 ‐3.2% 420 1,010 1,290 1,440 560 3,750 1,260 430 140 35.3% 15.6% 9.3% 6.0% 4.6% 3.3% 2.9% 2.6% 1.0% Utilities, Real Estate, Entertainment & Agriculture ↓↓↓ Source: DFP ‐ Quarterly Employment Survey (Seasonally Unadjusted), Excludes self‐employed Construction / property related
  25. 25. Northern Ireland’s ‘Employment Recessions’ & Recoveries Compared 1980s 1990s 2008-2013
  26. 26. Job losses in the latest downturn not as steep as the 1980s. But returning to peak is likely to take longer than 1980s (10yrs) Index 125 NI Employee Jobs Recessions / Recoveries Pre-Recession Peaks Indexed = 100 1980s 1990s 1990s 10yrs after peak employment rose by 19% 2008-2013 120 115 110 In 1990 UK recession, NI employment fell slightly & troughed 2 years after the prerecession peak 105 2008-2013 5 years (21 quarters) after 2008 Q2 peak NI jobs are still 4.1% lower as of Q2 2013 100 1980s 10yrs after downturn employment returns to peak 95 90 85 Employment troughed (-7.5%)13 quarters after 1979 Q4 peak & was 5.9% below peak after 21 quarters (just over 5 years) Source: DFP & UB Calculations 80 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs Time Since Pre-Recession Peak 8yrs 9yrs 10yrs
  27. 27. Manufacturing job losses have been nowhere near what they were like in the 1980s but recovery may be similar NI Manufacturing Recessions & Recoveries in Index 105 Employee Jobs (Pre-Recession Peaks Indexed = 100) 1980s 1990s 2007-2013 100 95 0.7% below Q3 1990 peak after >6 years (25 quarters) 90 >6 years (25 Quarters) after Q2 2007 peak employment is 9% lower 85 employment was 27% lower >6 years after Q2 1979 peak 80 75 70 Source: DFP & UB Calculations 65 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs Time Since Pre-Recession Peak 8yrs 9yrs 10yrs
  28. 28. In terms of job losses, construction has experienced its fastest & deepest recession on record NI Construction Recessions & Recoveries Compared Index 130 (Employee Jobs Pre-Recession Peaks Indexed = 100) 1980s 1990s 2007- 2013 Peak 1990 Q3 120 Current recession has seen construction employment plummet. Almost 6 years (23 quarters) after the downturn employment was still 36% below Q4 2007 peak. At this stage of the 1980s recession employment had fallen by just 26% 110 100 90 80 Peak 1979 Q2 70 60 2007Q4 - 2013 Q3 Source: DFP & UB calculations 50 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs Time Since Pre-Recession Peak 7yrs 8yrs 9yrs 10yrs
  29. 29. Service sector jobs recovery underway. However, it remains the slowest and weakest recovery to date Index 130 NI Service Sector Recoveries in Employee Jobs Pre-Recession Peaks Indexed = 100 1980s 125 1990s 2008-2013 +27% rise in 10yrs 120 115 110 1990s: NI lacked a developed private services sector which explains lack of job losses in early 1990s UK recession +15% rise in 10 years 105 1980s: 21 quarters after employment peak service sector employment was 4% above pre-recession peak 100 95 Peak Q1 2008 - Q3 2013 90 This is the weakest & slowest service sector recovery. 21 quarters on employment still 1.4% below peak 85 Source: DFP & UB Calculations 80 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs Time Since Pre-Recession Peak 8yrs 9yrs 10yrs
  30. 30. NI Public Sector v Private Sector Employment Levels & Growth
  31. 31. Headline public & private sector growth rates are misleading due to reclassification of some institutions as public sector NI Public & Private Sector Employment Growth Public Private 6% Job gains exaggerated as @5k jobs in financial institutions reclassified as public sector 4% 2% 0% -2% Job losses exaggerated as @5k jobs in financial institutions moved from private to public sector -4% Source: DFP -6% Q3 1993 Q3 1995 Q3 1997 Q3 1999 Q3 2001 Q3 2003 Q3 2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013
  32. 32. Both public & private sector employment levels are higher in Q3 2013 than they were last year NI Public v Private Sector Employment Growth 6% Public* (excluding financial institutions) Private* (incl. part-nationalised institutions) 4% Return of private sector jobs growth 2% 0% -2% -4% Source: DFP, *Ulster Bank estimates -6% Q3 1993 Q3 1995 Q3 1997 Q3 1999 Q3 2001 Q3 2003 Q3 2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013
  33. 33. Private sector employment growth has risen in each of the last 6 quarters but is still at mid-2006 levels NI Private Sector Employee Jobs 550,000 Source: DFP & UB estimates 525,000 515,020 491,640 500,000 475,000 450,000 425,000 487,640 Good Friday Agreement Signed April 1998 418,170 Q2 1998 400,000 375,000 Private Sector Unadjusted for Financial Institutions reclassification 350,000 Private Sector Adjusted (incl. part-nationalised institutions) 325,000 Q3 1993 Q3 1997 Q3 2001 Q3 2005 Q3 2009 Q3 2013
  34. 34. Public sector employment boom has been & gone. A period of job losses (attrition & non-replacement) is anticipated NI Public Sector Employee Jobs Levels 230,000 Source: DFP, * UB estimates Pre-recession peak Q4 2005 221,040 220,000 215,130 210,000 211,130 +26,000 jobs (13%) in 7yrs post GFA 200,000 190,000 Good Friday Agreement April 1998 195,120 Q2 98 Public sector employment boosted by @5k in Q4 2008 as part-nationalised financial institutions reclassified as public sector. Public sector jobs (excl. financial institutions) now estimated at @211k or 2003 levels. 180,000 Q3 1993 Q3 1995 Q3 1997 Q3 1999 Public Unadjusted Q3 2001 Q3 2003 Q3 2005 Q3 2007 Q3 2009 Q3 2011 Public Adjusted* (excl. financial institutions) Q3 2013
  35. 35. Private sector employment remains an estimated 4.5% since peak with public sector down an estimated 3.4% NI Public & Private Sector Employment % Change Q2 2008 - Q3 2013 0% -1% -2% -3% -4% -5% -6% -7% Source: DFP & *UB Estimates -8% Headline Public Sector Headline Private Sector Public Sector* Private Sector* (incl. (excl.part-nationalised part-nationalised financial institutions) financial institutions)
  36. 36. NI V UK Employment Performance Employee Jobs by Sector
  37. 37. NI & the UK both post strong rates of employment growth in Q2 & Q3 2013 Q/Q NI v UK Quarterly Employment Growth (Employee Jobs) 1.5% NI UK 1.0% 0.5% 0.0% -0.5% Source: DFP & NOMIS -1.0% Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013
  38. 38. NI playing catch-up with the UK employment recovery NI & UK Annual Employment Growth 5% NI NI playing catch-up with UK employment recovery UK 4% 3% 2% 1% 0% -1% NI outperformed the UK in the early 1990s but not now -2% -3% Source: DFP & NOMIS -4% Q3 1983 Q3 1986 Q3 1989 Q3 1992 Q3 1995 Q3 1998 Q3 2001 Q3 2004 Q3 2007 Q3 2010 Q3 2013
  39. 39. NI’s construction sector posts a quarter of growth after 7 quarters of decline Q/Q NI v UK Construction Employment Growth Q/Q (Employee Jobs) 4% NI UK 2% 0% -2% -4% -6% Source: DFP & NOMIS -8% Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013
  40. 40. UK construction industry posts modest 0.4% y/y decline in Q3 2013 while NI records a hefty 4.2% fall Construction Annual Employment Growth Employee Jobs 30% NI UK 25% 20% 15% 10% 5% 0% -5% NI outperformed the UK in the early 1990s but not now -10% -15% -20% Source: DFP & NOMIS Q3 1983 Q3 1986 Q3 1989 Q3 1992 Q3 1995 Q3 1998 Q3 2001 Q3 2004 Q3 2007 Q3 2010 Q3 2013
  41. 41. Both NI & UK post strong rates of manufacturing employment growth in Q2 & Q3 2013 NI v UK Manufacturing Employment Growth Q/Q Q/Q (Employee Jobs) 3% NI UK 2% 1% 0% -1% -2% -3% -4% -5% Source: DFP & NOMIS -6% Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013
  42. 42. NI’s employment recovery within the manufacturing sector has outperformed the UK Y/Y 4% NI & UK Manufacturing Annual Employment Growth NI UK 2% 0% -2% -4% -6% -8% NI outperformed the UK in the early 1990s but not in 2009 -10% Source: DFP & NOMIS -12% Q3 1983 Q3 1986 Q3 1989 Q3 1992 Q3 1995 Q3 1998 Q3 2001 Q3 2004 Q3 2007 Q3 2010 Q3 2013
  43. 43. NI & UK service sectors post strong rates of jobs growth in Q3 2013. The 7th successive quarter of growth for NI Q/Q NI v UK Services Quarterly Employment Growth (Employee Jobs) 1.5% NI UK 1.0% 0.5% 0.0% -0.5% -1.0% Source: DFP & NOMIS -1.5% Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013
  44. 44. Until recently NI’s service sector employment recovery has lagged significantly behind that of the UK Service Sector Annual Employment Growth Y/Y 5% NI UK 4% NI lagging UK employment recovery 3% 2% 1% 0% NI outperformed the UK in the early 1990s but not now -1% -2% Source: DFP & NOMIS -3% Q3 1983 Q3 1989 Q3 1995 Q3 2001 Q3 2007 Q3 2013
  45. 45. Apart from manufacturing, NI’s job losses have been more severe than in the UK Employee jobs relative to pre-downturn peaks as of Q3 2013 5% 0% -5% NI peak Q2 2008 -10% -15% -20% -25% -30% -35% -40% -45% NI peak Q2 2008 NI peak Q2 2007 NI peak Q4 2007 Construction NI Manufacturing UK Services Source: DFP & NOMIS Total
  46. 46. NI & UK Employee Jobs, RoI Employment Full-Time & Part-Time
  47. 47. Employment boom was predominantly part-time jobs while employment gloom was largely for full-timers NI Annual Employment Growth Y/Y Full-Time & Part-Time Employee Jobs 10% Full-Time 8% Part-Time Part-time employment growing at a much faster rate than full-time employment Total Surge in Full-Time employment 6% Recovery in PartTime jobs 4% 2% 0% -2% Full-Time employment fell at a much faster rate than part-time -4% Source: DFP, Figures are not seasonally adjusted -6% Sep-93 Mar-96 Sep-98 Mar-01 Sep-03 Mar-06 Sep-08 Mar-11 Sep-13
  48. 48. There are more part-time manufacturing jobs now than there were before the downturn NI Employee jobs relative to pre-downturn peaks Q3 2013 15% Full-Time Part-Time 5% -1.2% -5% -4.3% -15% -25% -35% Source: DFP Unadjusted figures, * relative to September 2008 -45% Manufacturing Construction Services Total*
  49. 49. …leading to a change in NI’s employment mix % of NI Employee Jobs Full-Time v Part-Time 75% Full-Time Part-Time Full-time employment's share rising again 65% Full-time employment's share of total employment is falling 55% 45% Part-time employment's share of total employment is rising 35% Source: DFP 25% Sep-93 Mar-96 Sep-98 Mar-01 Sep-03 Mar-06 Sep-08 Mar-11 Sep-13
  50. 50. In terms of full-time employment, NI outperformed the UK in the boom but until recently has lagged the UK recovery NI & UK Full-Time Annual Employment Growth Y/Y Employee Jobs 6% UK NI 4% NI outperforming UK 2% 0% -2% -4% Source: DFP & NOMIS -6% Sep-93 Mar-96 Sep-98 Mar-01 Sep-03 Mar-06 Sep-08 Mar-11 Sep-13
  51. 51. NI’s full-time employment back to mid-2005 levels NI Full-time & Part-time Employee Jobs Index Indexed Q1 1998 = 100 140 FT PT 130 120 110 NI full-time employment still at mid-2005 levels 100 90 Source: DFP, figures are not seasonally adjusted 80 Sep-98 May-00 Jan-02 Sep-03 May-05 Jan-07 Sep-08 May-10 Jan-12 Sep-13
  52. 52. RoI is now experiencing the fastest rate of employment growth amongst full-time employees Full-Time Annual Employment Growth Employee Jobs Y/Y UK 10% NI RoI RoI outperforming NI & UK during Celtic Tiger boom 5% 3.8% 2.3% 2.2% 0% -5% -10% RoI underperforming NI & UK during Celtic Tiger bust Source: CSO, DFP & Nomis -15% Sep-93 Mar-96 Sep-98 Mar-01 Sep-03 Mar-06 Sep-08 Mar-11 Sep-13
  53. 53. RoI largely outperformed the UK & NI in terms of part-time employment growth before during & after the downturn Part-Time Annual Employment Growth Employee Jobs Y/Y UK 15% NI RoI outperforming NI & UK during Celtic Tiger boom 12% RoI RoI still outperforming NI & UK during Celtic Tiger bust & recovery 9% 6% 3% 2.2% 1.0% 0% -0.6% -3% -6% Source: CSO, DFP & Nomis -9% Sep-93 Mar-96 Sep-98 Mar-01 Sep-03 Mar-06 Sep-08 Mar-11 Sep-13
  54. 54. RoI’s rebound in Full-Time employment is due to the fact it is coming off extremely low levels NI v UK v RoI Full-Time Employment Levels* Index 110 Pre-Recession Peaks Indexed = 100 NI UK RoI Pre-Recession Peak 105 100 -2.3% -5.5% 95 90 85 -18.5% 80 Source: ONS, CSO & DFP, *NI & UK unadjusted employee jobs 75 Peak Q2 1yr Q6 2yrs Q10 3yrs Q14 4yrs Q18 Time Since Pre-Recession Peak 5yrs Q22 6yrs
  55. 55. Since the downturn, part-time employment is almost 16% higher in the RoI and almost 2% higher in the UK NI v UK v RoI Part-Time Employment Levels* Index 120 Pre-Recession Peaks Indexed = 100 NI UK RoI Pre-Recession Peak +15.6% 115 110 105 +1.6% 100 -2.3% 95 Source: ONS, CSO & DFP, *NI & UK unadjusted employee jobs 90 Peak Q2 1yr Q6 2yrs Q10 3yrs Q14 4yrs Q18 Time Since Pre-Recession Peak 5yrs Q22 6yrs
  56. 56. NI males and females have recouped some of the jobs lost during the downturn NI Employee Jobs by gender & work pattern Males 4% Females All Employees 2% 0% -2% -4% -6% -8% Source: DFP -10% Full-time Parttime Sep-08 to Sep-13 All Full-time Parttime All Trough relative to Sep-08 Full-time Parttime All Recovery from trough
  57. 57. There are 2.9% more males in part-time employment than 5 years ago but 6% fewer full-time employees NI Employee Jobs by gender & work pattern % Change September 2008 - September 2013 6% Males Females All Employees 4% 2% 0% -2% -4% -6% -8% Source: DFP -10% Full-time Parttime All Full-time Parttime All Full-time Parttime All
  58. 58. In terms of part-time employment, NI outperformed the UK in the first part of the downturn but lagged in the recovery Y/Y NI & UK Part-Time Annual Employment Growth Employee Jobs 10% UK NI 8% 6% 4% 2% 0% -2% -4% Source: DFP & Nomis -6% Sep-93 Mar-96 Sep-98 Mar-01 Sep-03 Mar-06 Sep-08 Mar-11 Sep-13
  59. 59. Ulster Bank Northern Ireland  Purchasing Managers Index (PMI) Includes analysis of Global, Eurozone, UK, UK Regions, NI &  Republic of Ireland economic performance by sector November 2013 Survey Update  Issued 9th December 2013 Richard Ramsey Chief Economist Northern Ireland richard.ramsey@ulsterbankcm.com Twitter @UB_Economics
  60. 60. PMI Surveys Purchasing Managers’ Indexes (PMIs) are monthly surveys of private sector companies  which provide an advance indication of what is happening in the private sector economy  by tracking variables such as output, new orders, employment and prices across different  sectors. Index numbers are calculated from the percentages of respondents reporting an  improvement, no change or decline on the previous month.  These indices vary from 0 to  100 with readings of 50.0 signalling no change on the previous month. Readings above  50.0 signal an increase or improvement; readings below 50.0 signal a decline or  deterioration.  The greater the divergence from 50.0 the greater the rate of change  (expansion or contraction).  The indices are seasonally adjusted to take into consideration  expected variations for the time of year, such as summer shutdowns or holidays.  < 50.0 = Contraction         50.0 = No Change       > 50.0 = Expansion Data at a sector level are more volatile and 3‐month moving averages have been used to  more accurately identify the broad trends.
  61. 61. UK, RoI & NI firms all experienced jobs growth in November albeit at a weaker rate than October Private Sector Employment Levels Monthly 60 UK RoI Job Gains NI 55 50 Job Losses 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  62. 62. …with all sectors also reporting job gains over the last 3 months NI PMI - Employment Index 3 month moving average 65 Manufacturing Services Construction Job Gains 60 55 50 Job Losses 45 40 35 30 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  63. 63. All the UK regions and the Republic of Ireland post employment growth in November … Employment Levels November 2013 PMI Index 50 = No change 60 58 55.5 56 54.8 52 Increasing 54 51.2 Decreasing 50 48 Source: Markit Economics & Ulster Bank NI PMI 46 Lon SW WM East SE UK NW Scot EM Wal NE NI Y&H RoI
  64. 64. … and over the last 3 months to November Employment Levels 3 months to November 2013 PMI Index 58 50 = No change 56 55.3 54.7 Increasing 54 51.9 52 Decreasing 50 48 46 Source: Markit Economics & Ulster Bank NI PMI 44 Lon WM SW SE UK NW East Wal Scot NI EM Y&H NE RoI
  65. 65. NI posts a marginal decline in employment with the West Midlands & RoI the sharpest rise over the last 12 months Employment Levels PMI Index 12 months to November 2013 50 = No change 54 53.2 Increasing 52.1 52 50 49.9 Decreasing 48 Source: Markit Economics & Ulster Bank NI PMI 46 WM SE East Lon SW UK Scot Wal NW EM Y&H NE NI RoI
  66. 66. Northern Ireland Quarterly Employment Survey (QES) V Markit Economics / Ulster Bank PMI
  67. 67. PMI signals further employment growth in Q4 2013 PMI Index NI Employment: PMI v QES** Q/Q 60 1.0% **QES is DFP's official Quarterly Employment Survey of the number of jobs in NI & includes public sector Job gains 55 0.8% 0.5% 0.3% Discontinuity in QES Series 50 0.0% -0.3% 45 -0.5% Job losses 40 Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to average for October & November -1.0% -1.3% 35 2003 Q4 -0.8% -1.5% 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 No Change 2011 Q4 QES Q/Q 2013 Q4*
  68. 68. Services PMI more negative than QES in recent quarters. PMI signals further job gains in Q4 2013 PMI Index 65 NI Services Employment: PMI v QES* Q/Q 1.5% *QES is DFP's official Quarterly Employment Survey of the number of jobs in NI and includes the public sector 1.0% 60 Job gains Discontinuity in QES Series 55 0.5% 50 0.0% 45 -0.5% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to October & November average Job losses -1.0% 40 2003 Q4 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 No Change 2011 Q4 QES Q/Q 2013 Q4*
  69. 69. Manufacturing PMI suggests further jobs growth in Q4 PMI Index 65 NI Manufacturing Employment: PMI v QES** Q/Q 4% **QES is DFP's official Quarterly Employment Survey of the number of jobs in NI firms 60 Job gains Discontinuity in QES Series 3% 2% 55 1% 50 0% 45 -1% Job losses 40 35 -3% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to average for October & November -4% -5% 30 2003 Q4 -2% 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 2011 Q4 No Change 2013 Q4* QES Q/Q Slide 69
  70. 70. The PMI & official QES numbers have pointed to job losses throughout downturn. PMI suggests more growth in Q4 2013 PMI Index NI Construction Employment: PMI v QES** 65 Q/Q 5.0% **QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms 60 Job gains 55 Discontinuity in QES Series 50 2.5% 0.0% 45 -2.5% 40 35 30 25 -5.0% Job losses Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to average for October & November -7.5% 20 2003 Q4 -10.0% 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 No Change 2011 Q4 2013 Q4* QES Q/Q Slide 70
  71. 71. Unemployment
  72. 72. NI dole queue falls for the 10th month in a row NI unemployment falling M/M 5,000 4,000 3,000 Claimant Count Monthly Change Nov 2008 +3,200 2,000 1,000 -4,700 0 -1,000 Source: DFP -2,000 May-07 Jun-08 Jul-09 Aug-10 Sep-11 Oct-12 Nov-13 Slide 72
  73. 73. …the overall dole queue set to fall back below 60,000 NI Unemployment Claimant Count Levels 140,000 Jan 2013 64,900 at mid-1997 levels 120,000 100,000 80,000 60,000 60,200 Good Friday Agreement signed April 1998 57,900 40,000 20,000 Source: DFP Record low Aug 07 23,600 0 Nov-86 Nov-89 Nov-92 Nov-95 Nov-98 Nov-01 Nov-04 Nov-07 Nov-10 Nov-13 Slide 73
  74. 74. It’s been a ‘Mancession’, but there now appear to be more jobs for the boys NI 12 Monthly Change in Claimant Count 25,000 Male Female 20,000 15,000 10,000 5,000 0 Source: DFP, ONS -5,000 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Slide 74
  75. 75. Male unemployment heading down towards 40,000 NI Claimant Count by Gender 100,000 Male Female 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Nov-71 Source: ONS, NOMIS Nov-77 Nov-83 Nov-89 Nov-95 Nov-01 Nov-07 Nov-13 Slide 75
  76. 76. The number of claimants <25 years of age claiming the dole has been falling but is it due to employment of emigration? Youth unemployment falls in November Claimant Count Monthly Change 2,000 1,500 1,000 500 0 -500 -1,000 Source: DFP Youth unemployment figures are not seasonally adjusted. Therefore the spike in July and fall in October is largely due to leaving school and starting education -1,500 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Slide 76
  77. 77. No. of under 25s claiming the dole now at its lowest level since February 2009 & just 9% (1,254) above GFA levels NI Youth Claimant Count Levels 25,000 <25 years of age GFA April 1998 14,145 19,551 Highest level since October 1996 20,000 15,399 15,000 Nov 07 low 7,050 10,000 5,000 Source: DFP 0 Nov-97 Nov-99 Nov-01 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Slide 77
  78. 78. But NI-UK unemployment differential is now wider than it was when the Good Friday Agreement was signed in Apr-98 NI-UK unemployment rate differential widening % 8 NI 7 UK GFA Apr 1998 2.8 pp 6 6.7% 2.9 pp 5 4 3.8% 3 2 1 Source: ONS / DFP Claimant Count 0 Feb-98 May-00 Aug-02 Nov-04 Feb-07 May-09 Aug-11 Nov-13 Slide 78
  79. 79. NI has the highest unemployment rate of all the UK regions using the claimant count measure Claimant Count Unemployment by UK Region November 2013 % 7 Source: DFP & ONS, % of Workforce 6.7 6.1 6 5 4 3.8 3 2 SE SW East Lon EM UK Scot NW Wal WM Y&H NE NI Slide 79
  80. 80. Using ILO measure, NI’s headline rate is on a par with the UK. RoI’s unemployment rate now following a downward trend UK, NI & RoI (ILO) Unemployment Rates 16% NI UK RoI 14% 12% 12.7% 10% 8% 7.5% 7.4% 6% 4% 2% Source: ONS, Labour Force Survey & RoI Live Register 0% Oct-97 Oct-99 Oct-01 Oct-03 Oct-05 Oct-07 Oct-09 Oct-11 Oct-13 Slide 80
  81. 81. 5 regions have a higher rate than NI using the ILO unemployment rate (Wales also 7.5%) ILO Unemployment Rate Rate August - October 2013 12% 10.1% 10% 8% 7.5% 7.4% 6% 4% 2% 0% East SE SW EM Scot UK Wal NI NW Lon Y&H WM NE Slide 81
  82. 82. Almost 1 in 4 of under 25’s in NI looking for work cannot find any ILO Unemployment Rates by Age-Group August - October 2013 25% Source: DFP 20% 15% 10% 5% 0% 18-24 25-49 50+ Age Category 16+ Slide 82
  83. 83. NI has the 2nd highest youth unemployment rate in the UK ILO Youth Unemployment Rate (18-24yr olds) Rate August-October 2013 30% Source: ONS 23.8% 25% 25.2% 18.6% 20% 15% 10% 5% 0% SW SE East Wal NW EM Scot UK WM Y&H NE NI Lon Slide 83
  84. 84. NI’s current youth unemployment rate is > twice the rate that prevailed when the Good Friday Agreement was signed Northern Ireland Youth Unemployment Rate (ILO) 25% 23.8% 20% Good Friday Agreement Apr-98 10.6% 15% 10% 5% 0% Source: DFP Labour Force Survey (LFS) Oct-95 Oct-98 Oct-01 Oct-04 Oct-07 Oct-10 Oct-13 Slide 84
  85. 85. NI has the lowest employment rate in the UK… ILO Employment Rate (16-64yr olds) August - October 2013 Employment Rate 80 75 72.0 70 67.0 65 60 NI NE NW WM Wal Lon Y&H UK Scot EM SW East SE Slide 85
  86. 86. …and the highest rate of economic inactivity Rate % ILO Economic Inactivity Rate Rate (16-64yr olds) August - October 2013 30 27.4 25 22.1 20 15 SE East SW Scot EM UK Y&H Lon Wal WM NE NW NI Slide 86
  87. 87. Earnings
  88. 88. NI’s full-time employees have the lowest earnings of all the UK regions… Median Gross Weekly Earnings 2013 Median Gross Annual Earnings 2013 £ £ per wk All Employees Full-Time 35,000 All Employees Full-Time 700 Source: DFP & ONS ASHE Source: DFP ASHE 32,500 650 30,000 600 27,500 27,017 550 517.5 25,000 23,904 500 460 22,500 450 20,000 400 Lon SE East UK Scot SW EM WM NW Y&H Wal NE NI Lon SE UK Scot East WM NW SW Y&H EM Wal NE NI
  89. 89. …this is due to NI having the lowest private sector earnings for full-time employees of any UK region Median Gross Weekly Earnings 2013 £ per wk All Private Sector Employees Full-Time 700 Source: DFP ASHE 650 600 550 490.1 500 450 402.5 400 350 300 250 Lon SE UK East Scot WM SW Y&H NW EM NE Wal NI
  90. 90. Since the GFA, the gap between NI-UK median wages for fulltime employees has narrowed for women but widened for men NI Median Full-Time Earnings as a % of UK % Men Women All 100 GFA signed April 1998 96 95 90 89 86 85 Source: DFP Annual Survey of Household Earnings (ASHE) 2013 80 1997 1999 2001 2003 2005 2007 2009 2011 2013 Slide 90
  91. 91. In NI, the rate of inflation has outpaced earnings growth for most individuals % Change in N.Ireland Median Wages v UK Inflation Cumulative Increase 2007-2013* 30% Source: DFP ASHE & ONS, * April each year 25% 20% 15% 10% 5% 0% Total Public Private All Employees Total Public Private Full-Time Employees Only CPI RPI Inflation
  92. 92. After inflation the median private sector wage has fallen by almost 20% in real terms (after CPI inflation) % Change in N.Ireland Median Wages in Real Terms Cumulative Increase 2007-2013* 10% Source: DFP ASHE & ONS, * April each year 5% 0% -5% -10% -15% -20% -25% Total Public Private All Employees (Full-Time & Part-Time) Total Public Private Full-Time Employees Only
  93. 93. Those aged under 30 years of age have median earnings below the NI average… NI Annual Median Gross Pay By Age-Group £000 30 Full-Time Employees 2013 NI Average for all age-groups Source: DFP ASHE, April 2013 25 20 17.5 15 10 5 0 Age 18-21 Age 22-29 Age 30-39 Age 40-49 Age 50-59 Age 60+
  94. 94. … & those under 40 (including the household formation 25-34 yrs category) have experienced the biggest falls in real earnings NI Gross Median Wages for Full-Time Employees Cumulative Change in Real Terms 2007-2013* 0% -5% -6.3% -10% NI average change for employees from all age-groups -15% -20% Source: DFP ASHE & ONS, *using CPI inflation in April each year -25% Age 18-21 Age 22-29 Age 30-39 Age 40-49 Age 50-59 Age 60+
  95. 95. Disclaimer This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and is not intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service in any jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position or engage in transactions in any of the instruments mentioned. The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication and are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be construed as such. This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the information and disclaim all liability for use the recipient or their advisors make of the information. Over-the-counter (OTC) derivatives can involve a number of significant and complex risks which are dependent on the terms of the particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur substantial costs if you wish to close out your position. Calls may be recorded. Slide 95

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