Northern Ireland economy weakens, more become jobless

The Northern Ireland economy is continuing to weaken, according to official figures.

The Indexes of Services and Production both showed falling output in the second quarter of 2012.

Services fell by 1% over the quarter while production, which mainly reflects manufacturing output, fell by 5%.

Meanwhile the official number of unemployed has risen to 70,000, with another 200 people joining the dole last month.

Between June and August this year 8.1% of the population were unemployed.

Over the year, the number of people claiming unemployment benefit has increased by 4.8%, to 63,400, while in the UK as a whole the figure has fallen by 1.4%.

A large proportion of the unemployed are young people, with 21.1% of those between aged between 18 and 24 now unemployed, up 3.0% over the year.

Northern Ireland does not have its own quarterly GDP figures like those collected for the UK as a whole.

Instead the Indexes of Production and Services, and a third set of figures - the Index of Construction - are used to give an analysis of economic output.

The Index of Construction also showed falling output in the second quarter.

The total volume of construction output decreased by 8.2% over the quarter and was 2.3% lower compared to the same time in 2011.

This decrease follows three consecutive quarters of growth which had lead to glimmers of hope in the beleaguered sector.

Manufacturing has been one of the stronger parts of the Northern Ireland economy in recent years.

Despite the quarterly slip the Index of Production still shows growth of 1.6% compared to this time last year.

For services the picture is worse, with the year-on-year the Index of Services showing output is down by 3%.

'Employment Scheme'

The Enterprise Minister Arlene Foster said that despite the poor performance this quarter, the NI production sector still continued to perform better than the UK over the year.

"Northern Ireland is a small open economy and we cannot expect to remain unaffected by the continued uncertainty in markets around the world," she said.

"In the face of these challenges, it is important that local businesses continue to look for export opportunities in the wider global economy."

The CBI in Northern Ireland said the latest figures were disappointing and that it should be made easier for business to create jobs.

In a statement it said lowering corporation tax would be a way to help.

"Furthermore, we need to tackle the burden of employment regulation - and we would encourage businesses to support the Youth Employment Scheme, which provides support for any business who hires a young person between the ages of 18-24," it said.

Labour's Shadow Secretary of State for Northern Ireland, Vernon Coaker MP, said the government was "totally out of touch with what was happening in Northern Ireland".

""Labour has a plan to get Northern Ireland's economy moving. We've put forward proposals for investment in infrastructure, a temporary reduction in VAT and national insurance breaks for local small firms taking on more workers will help build Northern Ireland's economy.

"Theresa Villiers and George Osborne need to listen and act."