THE UK Government’s furlough scheme has succeeded in avoiding mass redundancies across the north during the pandemic, but several thousand jobs remain at risk as the initiative ends today.
The number of people still registered on the final day is unlikely to be confirmed until November.
The latest data available from HMRC revealed 36,000 people still furloughed in Northern Ireland on July 31.
Economists believe the majority of those people will avoid redundancy come tomorrow, but many won’t.
Ulster Bank’s chief economist Richard Ramsey anticipates between 20 to 25 per cent, or up to 7,000 of those 36,000 jobs, are potentially at real risk.
He said the north’s sizeable aerospace manufacturing sector is one of the most at risk areas.
It includes major employers such as Spirit Aero, Collins and Thompson Aero Seating.
“Two months ago there were over 5,000 manufacturing employees availing of the furlough scheme. “Within manufacturing aerospace is the sector that has been most adversely affected by the pandemic.”
Output within the sector during the second quarter of 2021 was 44 per cent down on pre-pandemic levels, the worst performing subsector within the Northern Ireland economy.
“Clearly, a meaningful recovery within the aerospace industry remains some way off and requires a significant pick-up in global air passenger traffic.
“Until then, the aerospace sector will be vulnerable to job losses unless some sector specific support is forthcoming.”
Calls for UK Chancellor Rishi Sunak to extend the furlough scheme have so far gone unheeded.
The Department of Finance said yesterday that a letter sent by finance minister Conor Murphy to Mr Sunak on Friday had not even garnered a response from The Treasury.
But even if 7,000 jobs are lost here, it’s still a far cry from warnings made during 2020 that Northern Ireland could face tens of thousands of redundancies after furlough ends.
In fact, a major issue for the north’s labour market in recent weeks has been the struggle of employers to fill vacancies, with the shortage of HGV drivers in particular having a major knock-on impact.
Mark Magill, a senior economist at Ulster University, said; “There are good reasons to believe a high proportion of furloughed workers who lose their jobs will be rehired.
“The number of job postings in Northern Ireland in August was 14,500, the highest on record.”
He said while the vacancies on offer may not always match up with the labour market, the overall volume of available vacancies provides a basis for optimism.
“At its peak in the early stages of the pandemic the scheme protected almost a quarter of a million jobs in the local economy,” said the economist.
“As it draws to a close the post furlough unemployment rate will likely remain below five per cent and the scheme will have met its objective of avoiding mass unemployment.”
The latest economic forecast from Danske Bank is now projecting the Northern Ireland economy will grow by 5.8 per cent this year and by 4.7 per cent in 2022.
The lender’s chief economist Conor Lambe said the forecast has been slightly lowered due to recent supply chain disruption and the expectation that some cautious consumer spending behaviour will persist.
“It is important to note that growth of 5.8 per cent would still represent a strong rate of expansion and encouraging progress towards economic recovery,” he added.
