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Economic Downturn in Northern Ireland: A Recovery Road Map Uncertain

Strategic Insights

— 1 min read

The COVID-19 pandemic has triggered a severe economic downturn in Northern Ireland, with the unemployment rate expected to rise to 10% before recovery starts. Ulster Bank chief economist Richard Ramsey warned that the economic contraction will be 10 times more severe than at the start of the year, and recovery to pre-virus levels of activity may not occur until 2024 or 2025.

Key Takeaways:

  • The economic downturn in Northern Ireland triggered by COVID-19 is 10 times more severe than the initial contraction at the start of the year, according to Ulster Bank chief economist Richard Ramsey.
  • Recovery to pre-virus levels of activity in the economy may not occur until 2024 or 2025, with unemployment rates expected to rise to 10% before the job market starts to recover.
  • Online bike accessories retailer WiggleCRC is proposing redundancies affecting 62 jobs, with staff to be offered alternative roles in Wiggle's headquarters.
  • The pandemic has disproportionately affected 16 to 24-year-olds, with youth unemployment predicted to soar to 25% (current rate 8.2%) in Northern Ireland.
  • Thinktank the Nevin Economic Research Institute's senior economist Paul Mac Flynn warned of a continued need to support workers after the government's Coronavirus Job Retention Scheme (CRJS) is fully wound down.
  • The pandemic has accelerated trends in employment that would have occurred gradually otherwise, and workers will need support adapting to a new era.
  • A shift in the economy during lockdown has meant that some jobs will no longer be viable, with a focus on job quality rather than quantity possibly leading to better outcomes.

Statistics:

  • Unemployment rate in Northern Ireland expected to rise to 10% before recovery starts.
  • 62 jobs at risk at online bike accessories retailer WiggleCRC, with staff to be offered alternative roles.
  • 16 to 24-year-olds to be hardest hit by job losses, with youth unemployment predicted to soar to 25% (current rate 8.2%).
  • Up to 250,000 workers in Northern Ireland placed on the Coronavirus Job Retention Scheme (CRJS).
  • Economic contraction expected to be 10 times more severe than initial contraction at start of the year.

Sources:

  • Ulster Bank chief economist Richard Ramsey
  • Stormont Economy Committee
  • Nevin Economic Research Institute senior economist Paul Mac Flynn

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