Northern Ireland Labour Market                 Update      Issued 14th December 2012               Richard Ramsey       Ch...
Workforce JobsEmployee Jobs + Government Supported      Trainees + Self-employed
54,700 fewer workforce jobs in June 2012 relative toJune 2008 – a fall of 6.4% (only updated annually)                    ...
13,500 fewer self-employed jobs in June 2012 relative toJune 2008 – a fall of 11% (only updated annually in Sept)         ...
NI has not experienced the jobs recovery that hasoccurred within the UK (only updated annually in September) Y/Y          ...
UK workforce jobs are just 0.5% below their June 2008peak whereas NI has not recouped any of its job losses               ...
Quarterly Employment Survey                       (QES)  QES is an employer survey (@ 5,500 companies) that    measures th...
Summary Table – Quarterly Employment Survey                               Northern Ireland Employees Jobs (Seasonally Adju...
NI posts second quarterly rise since Q2 2008 in Q3 2012(Q4 2009 represents start of new series & therefore not a Q/Q rise)...
Current employment levels back at late 2004 levels                         Northern Ireland Employee Jobs750,000          ...
Service sector: 2 successive quarters of modest growth                   NI Services Employee Jobs Quarterly Change     No...
Service sector employment is back to late 2006 /early 2007 levels                Northern Ireland Services Employee Jobs 6...
Manufacturing employment unchanged in Q3                          NI Manufacturing Employee Jobs                          ...
Recent manufacturing employment gains are within alonger-term trend of job losses                  NI Manufacturing Employ...
Construction sector has witnessed employmentdeclines in 17 of the last 18 quarters                         NI Construction...
Construction employment back to 1999 levels                    NI Construction Employee Jobs Levels  50,000               ...
Northern Ireland’sJob losses, recovery and current (net) position     2007/08-2012
No meaningful jobs recovery outside of manufacturing                       Northern Ireland Employment                    ...
Utilities post largest annual % gain with manufacturing the     largest numerical gain                                    ...
Property related sectors & manufacturing have seen the     biggest job losses over the last 4 years                       ...
Northern Ireland’s‘Employment Recessions’ & Recoveries Compared          1980s          1990s        2008-2012
Longest period of job losses but not as deep as the 1980s. Butreturning to peak is likely to take longer than 1980s (10yrs...
Manufacturing job losses have been nowhere near whatthey were like in the 1980s but recovery may be similar               ...
Construction is experiencing the fastest & deepest recessionin terms of job losses. A 1980s-style recovery is expected    ...
Service sector is experiencing its longest & deepestrecession. Unfortunately recovery will be weaker than 1980s           ...
NI Public Sector v Private Sector      Employment Levels           & Growth
Headline public & private sector growth rates are misleadingdue to reclassification of some institutions as public sector ...
Adjusting for the movement from private to public sectorpresents a slightly different picture             NI Public v Priv...
Private sector employment has stabilised.. But will it last?                                   NI Private Sector Employee ...
Public sector employment boom has been & gone. Asustained period of job losses is anticipated going forward               ...
Private sector employment has fallen by an estimated6.2% since peak with public sector down around 4.1%           NI Publi...
NI V UKEmployment Performance    Employee Jobs
The UK posts growth in 3 of the last 4 quarters                 NI v UK Quarterly Employment Growth   Q/Q                 ...
NI has not posted year-on-year employment growthsince Q3 2008  Y/Y                  All Employees Annual Employment Growth...
Employment growth has been lacking in both NI & theUK construction sectors         NI v UK Construction Employment Growth ...
NI’s construction sector experienced sharper rises andfalls relative to the UK                 Construction Annual Employm...
Both NI & UK manufacturing employment growth flat in Q3            NI v UK Manufacturing Employment Growth Q/Q     Q/Q    ...
NI experienced a shallower employment recession in the1980s relative to the UK. History has not repeated itself       Y/Y ...
UK service sector has posted employment gains in 4of the last 6 quarters, NI has managed just 2 quarters         NI v UK S...
NI’s service sector diverged from the UK in the 1990sUK recession & is diverging in the current one too  Y/Y              ...
Apart from manufacturing, NI’s job losses have beenmore severe than in the UK         Employee Jobs Q3 2012 relative to re...
NI & UK Employee Jobs Full-Time & Part-Time
Employment boom was predominantly part-time jobswhile employment gloom is largely full-time                   NI Annual Em...
More than twice as many full-time jobs lost as part-time        NI Employee Jobs Q3 2012 relative to recent peaks  0% -5% ...
…leading to a change in NI’s employment mix               % of NI Employee Jobs Full-Time v Part-Time 75%                 ...
NI outperformed the UK in the boom but isunderperforming in the recovery  Y/Y          NI & UK Full-Time Annual Employment...
NI’s full-time employment back to 2004 levels               NI Full-time & Part-time Employee Jobs  Index                 ...
NI lags the UK in part-time employment growth too  Y/Y    NI & UK Part-Time Annual Employment Growth                      ...
Ulster Bank Northern IrelandPurchasing Managers Index (PMI)   November 2012 Survey Update         Issued 10th December 201...
PMI SurveysPurchasing Managers’ Indexes (PMIs) are monthly surveys of private sector companies which provide an advance in...
Northern Ireland’s rate of decline in employment levelseases sharply in November                       Private Sector Empl...
… all NI sectors post employment declines over last 3months although manufacturing posts growth in November               ...
After the North West, Northern Ireland posts thesteepest decline in employment over the last month …                      ...
…and steepest decline over the last 3 months…                                    Employment Levels PMI index              ...
…and over the last 12 months                                     Employment Levels                                  Last 1...
Northern Ireland QuarterlyEmployment Survey (QES)            VMarkit Economics / Ulster        Bank PMI
PMI has been a reliable indicator of employment trends   PMI Index           NI Employment: PMI (up to Nov-12) v QES*     ...
Services PMI more negative in Q2 & Q3 than QES.Q4 PMI signals further job losses albeit marginal  PMI Index              N...
Manufacturing PMI suggested employment levels stabilised in Q3     PMI Index                 NI Manufacturing Employment: ...
The PMI & official QES numbers have pointed to job lossesthroughout downturn. PMI suggests further job losses in Q4    PMI...
Unemployment
NI dole queue still lengthening on a monthly basis                     NI unemployment still pushing higher   M/M         ...
…the overall dole queue is now at 64,700                NI Unemployment Claimant Count Levels 140,000 120,000             ...
No jobs for the boys? It’s been a ‘Mancession’                NI 12 Monthly Change in Claimant Count  25,000              ...
Rise in male unemployment accelerating again                        NI Claimant Count by Gender 100,000                   ...
Unemployment a major problem within the <25s               Youth unemployment falls for last 3 three months               ...
No. of under 25s claiming the dole is 1/3rd above GFA levels                         NI Youth Claimant Count Levels       ...
Not all sun, sea and sangria for NI’s Club 18-34:the first-time buyers of today and tomorrow                            NI...
Rise in claimant count across all occupation types                      Claimant Count Levels & Growth by Occupation ( Ran...
NI-UK Unemployment Differential is returning where it wasbefore the NICE Decade            NI-UK unemployment rate differe...
NI has the second highest unemployment rate using theclaimant count           Claimant Count Unemployment by UK Region %  ...
NI’s unemployment rate in line with the UK’s (although we view NI ILOfigure flatters true NI position) but remains well be...
… but only 4 regions have a lower rate using the ILOunemployment rate  Rate                  ILO Unemployment Rate        ...
And the employment rate is the lowest in the UKEmployment  Rate                  ILO Employment Rate (16-64yr olds)       ...
NI’s economic inactivity rate remains the highest within the UK    Rate %       ILO Economic Inactivity Rate Rate (16-64yr...
DisclaimerThis document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separ...
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NI labour market december 2012

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Northern Ireland Labour Market Update Issued 14th December 2012
Richard Ramsey
Ulster Bank Chief Economist Northern Ireland
richard.ramsey@ulsterbankcm.com

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NI labour market december 2012

  1. 1. Northern Ireland Labour Market Update Issued 14th December 2012 Richard Ramsey Chief Economist Northern Ireland richard.ramsey@ulsterbankcm.com
  2. 2. Workforce JobsEmployee Jobs + Government Supported Trainees + Self-employed
  3. 3. 54,700 fewer workforce jobs in June 2012 relative toJune 2008 – a fall of 6.4% (only updated annually) NI Workforce in Employment Jobs (Employee Jobs + Self Employment + Govt supported trainees) 900,000 Source: DFP, jobs in June of each year 858.1k 850,000 803.4k 800,000 750,000 700,000 650,000 600,000 550,000 500,000 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
  4. 4. 13,500 fewer self-employed jobs in June 2012 relative toJune 2008 – a fall of 11% (only updated annually in Sept) NI Self-Employment Jobs 150,000 Source: DFP, jobs in June of each year 140,000 130,000 122.1k 108.6k 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
  5. 5. NI has not experienced the jobs recovery that hasoccurred within the UK (only updated annually in September) 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% 1984 1988 1992 1996 2000 2004 2008 2012
  6. 6. UK workforce jobs are just 0.5% below their June 2008peak whereas NI has not recouped any of its job losses NI & UK Workforce Jobs (as of June 2012) 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
  7. 7. 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 QESexcludes the self-employed but is the preferred measure of employment within Northern Ireland
  8. 8. Summary Table – Quarterly Employment Survey Northern Ireland Employees Jobs (Seasonally Adjusted) Construction Services Manufacturing Total  2007 Q1 43,460 567,150 83,850 715,510 Q2 44,710 571,050 84,100 720,750 Q3 45,320 575,090 83,960 725,440 Q4 46,820 578,950 83,440 729,380 2008 Q1 45,860 582,910 83,710 732,620 Q2 44,860 584,430 83,390 733,050 Q3 43,500 581,240 82,260 727,440 Q4 41,670 579,670 80,080 721,460 2009 Q1 39,420 577,660 78,180 715,220 Q2 38,210 576,980 75,340 710,440 Q3 36,780 577,460 74,070 708,110 ↑    Old Series    ↑ DISCONTINUITY IN DATA SERIES DISCONTINUITY IN DATA SERIES ↓    New Series   ↓ ↓    New Series   ↓ Q4 37,120 581,210 73,280 711,430 2010 Q1 36,960 579,640 73,070 709,510 Q2 36,200 578,950 73,090 707,870 Q3 35,790 576,290 73,010 704,890 Q4 33,610 573,890 73,790 701,120 2011 Q1 33,370 573,040 73,590 699,840 Q2 32,780 570,620 , 73,510 697,180 Q3 32,930 569,150 73,850 695,930 Q4 31,640 565,050 75,420 691,900 2012 Q1 31,460 564,910 74,680 690,850 Q2 31,320 565,590 75,360 692,190 Q3  31,010 566,220 75,360 692,460 Latest Quarter Q/Q % Change ‐1.0% 0.1% 0.0% 0.0% Latest Quarter Y/Y % Change ‐5.8% ‐0.5% 2.0% ‐0.5% Fall from peak ‐ Nos* ‐15,810 ‐18,210 ‐8,740 ‐40,590 Fall from peak % Change* ‐33.8% ‐3.1% ‐10.4% ‐5.5% Source: DFP, **Peak to trough fall does not strictly use comparable data and is indicative only
  9. 9. NI posts second quarterly rise since Q2 2008 in Q3 2012(Q4 2009 represents start of new series & therefore not a Q/Q rise) Nos NI Employee Jobs Quarterly Change Excludes self-employed 6000 Discontinuity in Series 4000 2000 20,580 1,340 24,940 270 0 -2000 -4000 -6000 Source: DFP -8000 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012
  10. 10. Current employment levels back at late 2004 levels Northern Ireland Employee Jobs750,000 733,050 692,460700,000 Discontinuity in Series650,000 613,250600,000 Q2 1998550,000 Source: DFP500,000 Q1 1993 Q3 1995 Q1 1998 Q3 2000 Q1 2003 Q3 2005 Q1 2008 Q1 2010 Q3 2012
  11. 11. Service sector: 2 successive quarters of modest growth NI Services Employee Jobs Quarterly Change Nos Excludes self-employed 6,000 Discontinuity in Series 4,000 2,000 -7,450 -16,300 680 630 0 -2,000 -4,000 -6,000 Source: DFP -8,000 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012
  12. 12. Service sector employment is back to late 2006 /early 2007 levels Northern Ireland Services Employee Jobs 625,000 584,430 575,000 566,220 Discontinuity in Series 525,000 475,000 Q2 1998 454,990 425,000 Source: DFP 375,000 Q1 1993 Q1 1997 Q1 2001 Q1 2005 Q1 2009 Q3 2012
  13. 13. Manufacturing employment unchanged in Q3 NI Manufacturing Employee Jobs Quarterly Change (Excludes self-employed) Nos2,0001,500 Discontinuity in Series1,000 500 -9,640 0 -500-1,000-1,500-2,000-2,500 Source: DFP-3,000 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012
  14. 14. Recent manufacturing employment gains are within alonger-term trend of job losses NI Manufacturing Employee Jobs Levels120,000 104,940 (Q3 1998 just110,000 after GFA)100,000 84,100 90,000 Q2 2007 80,000 75,360 70,000 Discontinuity in Series 60,000 Source: DFP 50,000 Q1 1993 Q3 1995 Q1 1998 Q3 2000 Q1 2003 Q3 2005 Q1 2008 Q1 2010 Q3 2012
  15. 15. Construction sector has witnessed employmentdeclines in 17 of the last 18 quarters NI Construction Employee Jobs Nos Quarterly Change (Excludes self-employed)2,0001,500 Discontinuity in Series1,000 -6,110 500 -10,040 0 -500-1,000-1,500-2,000 Source: DFP-2,500 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012
  16. 16. Construction employment back to 1999 levels NI Construction Employee Jobs Levels 50,000 46,820 45,000 40,000 35,000 Discontinuity in Series 30,000 31,010 Back to 1999 levels 25,000 Source: DFP, QES 20,000 Q1 1993 Q3 1995 Q1 1998 Q3 2000 Q1 2003 Q3 2005 Q1 2008 Q1 2010 Q3 2012
  17. 17. Northern Ireland’sJob losses, recovery and current (net) position 2007/08-2012
  18. 18. No meaningful jobs recovery outside of manufacturing Northern Ireland Employment (Employee Jobs) 10% Peak to Trough Recovery from Trough Q3 2012 Relative to Peak 0% -10% -20% -30% Source: DFP, QES -40% All Sectors Services Manufacturing Construction
  19. 19. Utilities post largest annual % gain with manufacturing the largest numerical gain Northern Ireland Employment Change (Ranked by % change) September 2011 ‐ September 2012 Broad Industrial Group Net Job Change % Change Utilities, Electricity, gas, steam & air conditioning supply 140 10.9%manufacturing Arts, entertainment & recreation 1,250 9.0% Utilities, & tourism Administrative & support service activities 1,160 2.8% manufacturingrelated sectors Professional, scientific & technical activities 1,120 2.8% & tourism Manufacturing 1,490 2.0% related sectors Accomodation & food service activities 360 0.9% Real estate activities 60 0.8% Transport & storage 10 0.0% Wholesale & retail trade; repair of motor vehicles ‐330 ‐0.3% Agriculture, forestry & fishing ‐120 ‐1.0% Other service activities ‐150 ‐1.1% Education ‐940 ‐1.4% Human health & social work activities ‐1,930 ‐1.6% Information & communication ‐280 ‐1.7% Public administration & defence; social security ‐960 ‐1.7% Construction / Mining & quarrying ‐30 ‐1.8% Construction / property Water supply, sewerage, waste management  ‐120 ‐2.5% property related Construction ‐1,920 ‐5.8% related Financial & insurance activities ‐1,610 ‐7.9% Total ‐3,290 ‐0.5% Source: DFP ‐ Quarterly Employment Survey (Seasonally Unadjusted), Excludes self‐employed
  20. 20. Property related sectors & manufacturing have seen the biggest job losses over the last 4 years Northern Ireland Employment Change (Ranked by % change) September 2008 ‐ September 2012 Broad Industrial Group Net Job Change % Change Utilities Electricity, gas, steam & air conditioning supply 230 19.3% Real estate activities 730 11.2% Utilities Arts, entertainment & recreation 1,360 9.8% Human health & social work activities 590 0.5% Other service activities 30 0.2% Education ‐250 ‐0.4% Agriculture, forestry & fishing ‐150 ‐1.2% Professional, scientific & technical activities ‐400 ‐1.7% Information & communication ‐280 ‐1.7% Water supply, sewerage, waste management  ‐180 ‐3.7% Administrative & support service activities ‐1,610 ‐3.7% Accommodation & food service activities ‐1,980 ‐4.5% Public administration & defence; social security ‐2,640 ‐4.5% Wholesale & retail trade; repair of motor vehicles ‐6,940 ‐5.4% Transport & storage ‐1,390 ‐5.4%Construction / Financial & insurance activities ‐1,360 ‐6.8% Construction / property Manufacturing ‐7,060 ‐8.6% property related Mining & quarrying ‐470 ‐22.0% related Construction ‐12,490 ‐28.7% Total ‐34,260 ‐4.7% Source: DFP ‐ Quarterly Employment Survey (Seasonally Unadjusted), Excludes self‐employed
  21. 21. Northern Ireland’s‘Employment Recessions’ & Recoveries Compared 1980s 1990s 2008-2012
  22. 22. Longest period of job losses but not as deep as the 1980s. Butreturning to peak is likely to take longer than 1980s (10yrs) NI Employee Jobs Recessions / Recoveries Index Pre-Recession Peaks Indexed = 100 1990s 125 10yrs after peak 1980s 1990s 2008-2012 employment rose by 19% 120 115 In 1990 UK recession, NI employment 110 fell slightly & troughed 2 years after the pre-recession peak 1980s 105 2008-2012 10yrs after downturn employment returns to peak 15 quarters of decline before rise in 16th 100 quarter.17 quarters after 2008 Q2 peak NI jobs have fallen by 5.5% as of Q3 2012 Q2 95 90 Employment troughed (-7.5%)13 quarters 85 after 1979 Q4 peak & was 7.0% below peak after 17 quarters Source: DFP & UB Calculations 80 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs 8yrs 9yrs 10yrs Time Since Pre-Recession Peak
  23. 23. Manufacturing job losses have been nowhere near whatthey were like in the 1980s but recovery may be similar NI Manufacturing Recessions & Recoveries in Index Employee Jobs (Pre-Recession Peaks Indexed = 100) 105 1980s 1990s 2007-2012 100 95 2.3% below Q3 1990 peak after 21 quarters 90 10.4% decline 21 quarters after Q2 2007 peak 85 21 quarters after Q2 1979 peak employment was 26% 80 lower 75 70 Source: DFP & UB Calculations 65 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs 8yrs 9yrs 10yrs Time Since Pre-Recession Peak
  24. 24. Construction is experiencing the fastest & deepest recessionin terms of job losses. A 1980s-style recovery is expected NI Construction Recessions & Recoveries Compared Index (Employee Jobs Pre-Recession Peaks Indexed = 100) 130 1980s 1990s 2007- 2012 Peak 1990 Q3 120 Current recession has seen construction employment 110 fall by one third in 4 years. In the 1980s it took over 7 years to for employment to fall by a similar margin 100 90 80 Peak 1979 Q2 70 Source: DFP & UB calculations 2007Q4 - 2012 Q3 60 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs 8yrs 9yrs 10yrs Time Since Pre-Recession Peak
  25. 25. Service sector is experiencing its longest & deepestrecession. Unfortunately recovery will be weaker than 1980s NI Service Sector Recoveries in Employee Jobs Index Pre-Recession Peaks Indexed = 100 130 1980s 1990s 2008-2012 125 +27% rise in 10yrs 120 1990s: NI lacked a developed private 115 services sector which explains lack of job losses in early 1990s UK recession +15% rise 110 in 10 years 105 1980s: 17 quarters after employment peak 100 service sector employment was almost 3% Peak 2008 Q1 above pre-recession peak 95 90 Current recession is the longest and deepest recession to date. 17 quarters on employment still 85 3.1% below peak Source: DFP & UB Calculations 80 Peak 1 year 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs 8yrs 9yrs 10yrs Time Since Pre-Recession Peak
  26. 26. NI Public Sector v Private Sector Employment Levels & Growth
  27. 27. Headline public & private sector growth rates are misleadingdue to reclassification of some institutions as public sector NI Public v 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 -4% jobs in financial institutions moved Source: DFP from private to public sector -6% Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 1994 1996 1997 1999 2000 2002 2003 2005 2006 2008 2009 2011 2012
  28. 28. Adjusting for the movement from private to public sectorpresents a slightly different picture NI Public v Private Sector Employment Growth 6% Public* (excluding financial institutions) Private (incl. part-nationalised institutions) 4% 2% 0% 6 -2% -4% Source: DFP, * Ulster Bank estimates -6% Q3 1994 Q3 1997 Q3 2000 Q3 2003 Q3 2006 Q3 2009 Q3 2012
  29. 29. Private sector employment has stabilised.. But will it last? NI Private Sector Employee Jobs 550,000 Source: DFP & UB estimates 525,000 515,000 500,000 482,900 475,000 Good Friday 478,900 Agreement 450,000 Signed April 1998 418,170 Q2 1998 425,000 400,000 Private Sector Unadjusted for Financial Institutions reclassification 375,000 Private Sector Adjusted (incl. part-nationalised institutions) 350,000 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
  30. 30. Public sector employment boom has been & gone. Asustained period of job losses is anticipated going forward NI Public Sector Employee Jobs Levels 230,000 Pre-recession peak Source: DFP, * UB estimates Q4 2005 221,050 220,000 213,480 210,000 Good Friday Agreement Signed April 1998 209,480 195,120 Q2 98 +26,000 jobs (13%) in 7yrs Public sector employment boosted by @5k in Q4 2008 as post GFA part-nationalised financial 200,000 institutions reclassified as public sector. Public sector jobs (excl. financial institutions) now estimated at @209.5k or Q4 2002 levels. 190,000 Public Unadjusted Public Adjusted* (excl. financial institutions) 180,000 Q3 1994 Q3 1997 Q3 2000 Q3 2003 Q3 2006 Q3 2009 Q3 2012
  31. 31. Private sector employment has fallen by an estimated6.2% since peak with public sector down around 4.1% NI Public & Private Sector Employment % Change Q2 2008 - Q3 2012 0% -1% -2% -3% -4% -5% -6% -7% -8% -9% Source: DFP & *UB Estimates -10% Headline Public Headline Private Public Sector* Private Sector* (incl. Sector Sector (excl.part-nationalised part-nationalised financial institutions) financial institutions)
  32. 32. NI V UKEmployment Performance Employee Jobs
  33. 33. The UK posts growth in 3 of the last 4 quarters NI v UK Quarterly Employment Growth Q/Q (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
  34. 34. NI has not posted year-on-year employment growthsince Q3 2008 Y/Y All Employees Annual Employment Growth 4% NI/UK Divergence with NI UK employment recovery 3% 2% 1% 0% -1% NI outperformed -2% the UK in the early 1990s but not now -3% Source: DFP & NOMIS -4% Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 1982 1986 1990 1993 1997 2001 2005 2008 2012
  35. 35. Employment growth has been lacking in both NI & theUK construction sectors NI v UK Construction Employment Growth Q/Q Q/Q (Employee Jobs) 4.0% NI UK 2.0% 0.0% -2.0% -4.0% -6.0% Source: DFP & NOMIS -8.0% Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012
  36. 36. NI’s construction sector experienced sharper rises andfalls relative to the UK Construction Annual Employment Growth Employee Jobs 30% NI UK 25% 20% 15% 10% 5% 0% -5% NI outperformed -10% the UK in the early 1990s but not now -15% Source: DFP & NOMIS -20% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1983 1986 1989 1993 1996 1999 2002 2006 2009 2012
  37. 37. Both NI & UK manufacturing employment growth flat in Q3 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
  38. 38. NI experienced a shallower employment recession in the1980s relative to the UK. History has not repeated itself Y/Y NI & UK Manufacturing Annual Employment Growth 4% 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% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1983 1986 1989 1993 1996 1999 2002 2006 2009 2012
  39. 39. UK service sector has posted employment gains in 4of the last 6 quarters, NI has managed just 2 quarters NI v UK Services Quarterly Employment Growth Q/Q (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
  40. 40. NI’s service sector diverged from the UK in the 1990sUK recession & is diverging in the current one too Y/Y Service Sector Annual Employment Growth 5% NI UK NI/UK Divergence with 4% employment recovery 3% 2% 1% 0% NI outperformed -1% the UK in the early 1990s but not now -2% Source: DFP & NOMIS -3% Q2 1983 Q3 1990 Q4 1997 Q1 2005 Q2 2012
  41. 41. Apart from manufacturing, NI’s job losses have beenmore severe than in the UK Employee Jobs Q3 2012 relative to recent peaks 0% -5% NI Peak Q2 2008 NI Peak Q2 2008 -10% -15% NI Peak Q2 2007 -20% -25% -30% -35% NI Peak Q4 2007 NI UK Source: DFP & NOMIS -40% Construction Manufacturing Services Total
  42. 42. NI & UK Employee Jobs Full-Time & Part-Time
  43. 43. Employment boom was predominantly part-time jobswhile employment gloom is largely full-time NI Annual Employment Growth Y/Y Full-Time & Part-Time Employee Jobs10% Full-Time Part-Time Total 8% Part-time employment growing at a much faster rate than full-time employment 6% 4% 2% 0% Full-time employment falling at a much-2% faster rate than part-time-4%-6% Sep-94 Sep-96 Sep-98 Sep-00 Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12
  44. 44. More than twice as many full-time jobs lost as part-time NI Employee Jobs Q3 2012 relative to recent peaks 0% -5% -3.5% -7.2% -10% -15% -20% -25% -30% -35% Full-Time Part-Time -40% Manufacturing Construction Services Total*
  45. 45. …leading to a change in NI’s employment mix % of NI Employee Jobs Full-Time v Part-Time 75% Full-Time Part-Time 65% Full-time employments share of total employment is falling 55% 45% Part-time employments share of total employment is rising 35% Source: DFP 25% Sep-94 Sep-97 Sep-00 Sep-03 Sep-06 Sep-09 Sep-12
  46. 46. NI outperformed the UK in the boom but isunderperforming in the recovery Y/Y NI & UK Full-Time Annual Employment Growth Employee Jobs 6% UK NI 4% 2% 0% -2% -4% -6% Sep-94 Sep-96 Sep-98 Sep-00 Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12
  47. 47. NI’s full-time employment back to 2004 levels NI Full-time & Part-time Employee Jobs Index Indexed Q1 1998 = 100 140 FT PT 130 120 110 NI full-time employment 100 back to 2004 levels 90 80 Sep-98 Sep-00 Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12
  48. 48. NI lags the UK in part-time employment growth too Y/Y NI & UK Part-Time Annual Employment Growth Employee Jobs 12% UK NI 10% 8% 6% 4% 2% 0% -2% -4% -6% Sep-94 Sep-96 Sep-98 Sep-00 Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12
  49. 49. Ulster Bank Northern IrelandPurchasing Managers Index (PMI) November 2012 Survey Update Issued 10th December 2012 Richard Ramsey Chief Economist Northern Ireland richard.ramsey@ulsterbankcm.com
  50. 50. PMI SurveysPurchasing 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 = ExpansionData at a sector level are more volatile and 3‐month moving averages have been used to more accurately identify the broad trends.
  51. 51. Northern Ireland’s rate of decline in employment levelseases sharply in November Private Sector Employment Levels Monthly 60 NI UK RoI Job Gains 55 50 Job Losses 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  52. 52. … all NI sectors post employment declines over last 3months although manufacturing posts growth in November NI PMI - Employment Index 3 month moving average 65 Manufacturing Services Construction Job Gains 60 55 50 45 Job Losses 40 35 30 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  53. 53. After the North West, Northern Ireland posts thesteepest decline in employment over the last month … Employment Levels November 2012 PMI Index 54 50 = No change Increasing 51.8 52 50 49.4 48 47.9 Decreasing 46 44 Source: Markit Economics & Ulster Bank NI PMI 42 Y&H EM SE SW Scot East NE WM Wal UK Lon NI NW RoI
  54. 54. …and steepest decline over the last 3 months… Employment Levels PMI index Last 3 months to November 2012 54 50 = No change Increasing 51.9 52 50 49 48 Decreasing 46 46.4 44 Source: Markit Economics & Ulster Bank NI PMI 42 EM WM Y&H Scot SE UK East Wal SW NW NE Lon NI RoI
  55. 55. …and over the last 12 months Employment Levels Last 12 Months to November 2012PMI index56 50 = No change Increasing5452 50.650 49.9 Decreasing48 46.94644 Source: Markit Economics & Ulster Bank NI PMI42 EM WM Y&H SE Scot East UK SW NE NW Wal Lon NI RoI
  56. 56. Northern Ireland QuarterlyEmployment Survey (QES) VMarkit Economics / Ulster Bank PMI
  57. 57. PMI has been a reliable indicator of employment trends PMI Index NI Employment: PMI (up to Nov-12) v QES* Q/Q 60 1.0% *QES is DFPs official Quarterly Employment Survey of the number of jobs in NI & includes the public sector 0.8% 55 Job 0.5% gains 0.3% Discontinuity in QES Series 50 0.0% -0.3% 45 -0.5% Job losses -0.8% 40 -1.0% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / -1.3% contraction,PMI 3mth averages 35 -1.5% Dec-03 Jun-05 Dec-06 Jun-08 Dec-09 Jun-11 Dec-12 PMI Employment Index No Change QES Q/Q
  58. 58. Services PMI more negative in Q2 & Q3 than QES.Q4 PMI signals further job losses albeit marginal PMI Index NI Services Employment: PMI (up to Nov-12) v QES* Q/Q 65 1.5% *QES is DFPs official Quarterly Employment Survey of the number of jobs in NI and includes the public sector 60 1.0% Discontinuity in QES Series 55 0.5% Job gains 50 0.0% 45 -0.5% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages Job losses 40 -1.0% Dec-03 Jun-05 Dec-06 Jun-08 Dec-09 Jun-11 Dec-12 PMI Employment Index No Change QES Q/Q
  59. 59. Manufacturing PMI suggested employment levels stabilised in Q3 PMI Index NI Manufacturing Employment: PMI (Nov-12) v QES* Q/Q 65 4% *QES is DFPs official Quarterly Employment Survey of the number of jobs in NI firms 3% 60 Discontinuity in QES Series Job gains 2% 55 1% 50 0% 45 -1% Job losses -2% 40 -3% 35 Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / -4% contraction,PMI 3mth averages 30 -5% Dec-03 Jun-05 Dec-06 Jun-08 Dec-09 Jun-11 Dec-12 PMI Employment Index No Change QES Q/Q Slide 59
  60. 60. The PMI & official QES numbers have pointed to job lossesthroughout downturn. PMI suggests further job losses in Q4 PMI Index NI Construction Employment: PMI (to Nov-12) v QES Q/Q 65 5.0% *QES is NIs official Quarterly Employment Survey of the no. of jobs in NI firms 60 Job 2.5% 55 gains Discontinuity in QES Series 50 0.0% 45 -2.5% 40 35 -5.0% 30 Source: DFP, Ulster Bank & Markit Economics, PMI Job losses -7.5% 25 Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages 20 -10.0% Dec-03 Jun-05 Dec-06 Jun-08 Dec-09 Jun-11 Dec-12 PMI Employment Index No Change QES Q/Q Slide 60
  61. 61. Unemployment
  62. 62. NI dole queue still lengthening on a monthly basis NI unemployment still pushing higher M/M Claimant Count Monthly Change 4,000 Nov 2008 +3,200 3,000 Nov 2,000 2012 +500 1,000 0 Source: DFP -1,000 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Slide 62
  63. 63. …the overall dole queue is now at 64,700 NI Unemployment Claimant Count Levels 140,000 120,000 Nov 2012 64,700 highest levels since April 1997 100,000 80,000 60,000 Good Friday 40,000 Agreement signed April 1998 57,900 Record low 20,000 Aug 07 Source: DFP 23,500 0 Nov-85 Nov-88 Nov-91 Nov-94 Nov-97 Nov-00 Nov-03 Nov-06 Nov-09 Nov-12 Slide 63
  64. 64. No jobs for the boys? It’s been a ‘Mancession’ 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-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Slide 64
  65. 65. Rise in male unemployment accelerating again 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 Source: ONS, NOMIS 0 Nov-72 Nov-77 Nov-82 Nov-87 Nov-92 Nov-97 Nov-02 Nov-07 Nov-12 Slide 65
  66. 66. Unemployment a major problem within the <25s Youth unemployment falls for last 3 three months Claimant Count Monthly Change 2,000 1,500 1,000 500 0 -500 -1,000 Source: DFP -1,500 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Slide 66
  67. 67. No. of under 25s claiming the dole is 1/3rd above GFA levels NI Youth Claimant Count Levels <25 years of age 25,000 GFA April 1998 19,551 14,145 Highest level 17,876 since October 20,000 1996 15,000 Nov 07 low 7,050 10,000 5,000 Source: DFP 0 Nov-96 Nov-98 Nov-00 Nov-02 Nov-04 Nov-06 Nov-08 Nov-10 Nov-12 Slide 67
  68. 68. Not all sun, sea and sangria for NI’s Club 18-34:the first-time buyers of today and tomorrow NI Unemployment by Age 40,000 <25yrs of Age 25-34 Yrs of Age 30,000 House 20,000 price peak 10,000 Source: ONS, Claimant Count 0 Jan-07 Nov-07 Sep-08 Jul-09 May-10 Mar-11 Jan-12 Nov-12 Slide 68
  69. 69. Rise in claimant count across all occupation types Claimant Count Levels & Growth by Occupation ( Ranked by % Growth)  November 2012  Increase in Numbers  Occupation  % Change Levels Nov 2007 ‐ Nov 2012Sales & Customer Service Occupations 10,720 8,015 296%Personal Service Occupations 4,715 3,370 251%Skilled Trades Occupations 12,030 8,150 210%Associate Professional & Technical Occupations 3,290 2,180 196%Managers & Senior Officials 735 1,120 191%Process, Plant & Machine Operatives 8,135 5,255 182%Administrative & Secretarial Occupations 4,720 2,940 165%Professional Occupations 1,865 1,100 144%Elementary Occupations 16,290 8,930 121%Source: ONS, refers to occupation sought by claimants   Slide 69
  70. 70. NI-UK Unemployment Differential is returning where it wasbefore the NICE Decade NI-UK unemployment rate differential widening % 8 NI UK 7.1% 7 2.3 pp May 1999 6 2.4 pp 5 4.8% 4 3 2 1 Source: ONS / DFP Claimant Count 0 Nov-98 Nov-00 Nov-02 Nov-04 Nov-06 Nov-08 Nov-10 Nov-12 Slide 70
  71. 71. NI has the second highest unemployment rate using theclaimant count Claimant Count Unemployment by UK Region % November 2012 9 Source: DFP & ONS, % of Workforce 8 7.8 7.1 7 6 4.9 5 4 3 2 SE SW East Lon EM UK Scot Wal NW WM Y&H NI NE Slide 71
  72. 72. NI’s unemployment rate in line with the UK’s (although we view NI ILOfigure flatters true NI position) but remains well below that of the RoI UK, NI & RoI Unemployment Rates Source: ONS, Labour Force Survey & CSO Live Register 15% NI UK RoI 13% 11% NI & UK 9% 7.8% 7% 5% 3% Oct-96 Oct-98 Oct-00 Oct-02 Oct-04 Oct-06 Oct-08 Oct-10 Oct-12 Slide 72
  73. 73. … but only 4 regions have a lower rate using the ILOunemployment rate Rate ILO Unemployment Rate August - October 2012 12% 10% 9.5% 7.8% 7.8% 8% 6% 4% 2% 0% SW SE East Scot UK NI Wal EM NW WM Y&H Lon NE Slide 73
  74. 74. And the employment rate is the lowest in the UKEmployment Rate ILO Employment Rate (16-64yr olds) August - October 2012 80 75 71.2 70 67.5 65 60 NI NE Lon Wal NW WM Scot EM Y&H UK SE SW East Slide 74
  75. 75. NI’s economic inactivity rate remains the highest within the UK Rate % ILO Economic Inactivity Rate Rate (16-64yr olds) August - October 2012 30 26.7 25 22.6 20 15 East SE SW EM Y&H UK WM Scot Lon NW Wal NE NI Slide 75
  76. 76. DisclaimerThis document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and isnot intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service inany jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position orengage 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 andare subject to change without notice. The information contained herein should not be construed as advice, and is not intended to beconstrued as such.This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained herewithout seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to theinformation and disclaim all liability for use the recipient or their advisors make of the information.Over-the-counter (OTC) derivates can involve a number of significant and complex risks which are dependent on the terms of the particulartransaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incursubstantial costs if you wish to close out your position.Calls may be recorded. Slide 76

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