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NI job market steady despite tax concerns

John Campbell
BBC News NI economics and business editor
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Services, which is the dominant sector of the economy, grew by 0.6% in the final quarter of the year

Official figures show little sign of a downturn in the Northern Ireland jobs market despite growing concerns among businesses about the impact of next month's increase in National Insurance.

Payroll data suggests companies were continuing to add staff in January and February.

There were just 150 redundancies announced in February, less than the monthly averages for 2023 and 2024.

The employment rate, the proportion of working age adults in a job, was 72.2% in the period from November to January.

National Insurance increase

That was unchanged from the previous quarter but down slightly compared to the same period in 2024.

In April, UK businesses will face an increase in employers National Insurance, the tax they pay on their workers wages.

That move was announced in the autumn Budget to raise additional money for public services.

Business surveys suggest that could lead companies to freeze recruitment or cut jobs.

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There were just 150 redundancies announced in February, less than the monthly averages for 2023 and 2024

Earlier in March an Ulster Bank survey suggested businesses in Northern Ireland had begun cutting jobs for the first time in four years.

Sebastian Burnside, economist at Ulster Bank's parent company NatWest, said firms were acting to "try to limit overheads" before the impending increase in National Insurance contributions.

There are several possible reasons for the difference between business survey data and the official figures.

One reason is timing. The official data takes longer to emerge so will not immediately show a change in economic conditions.

Business surveys can also reflect sentiment which does not always result in actions.

Services sector growth

Meanwhile, other data suggests that Northern Ireland's private sector ended 2024 on a high with growth in services and manufacturing.

Services, which is the dominant sector of the economy, grew by 0.6% in the final quarter of the year.

Growth was led by businesses services, which includes things like accountancy and law, which saw output expand by 6.5% over the quarter.

Manufacturing grew by 2.2% over the quarter with a strong performance in metal products and textiles.