New UU Economic Paper suggests Post-Covid recovery may take 10-13 years and hit jobs harder than last recession
The UU Economic Policy Centre’s latest paper on the impact of Covid-19 on the NI Economy highlights that, unlike the 2008 post financial crisis which was ‘predominantly a GDP recession’, the post-Covid crisis is likely to hit jobs harder.
The paper found that by mid-June the NI benefit claimant count was estimated at just over 63k, a level not seen since the height of the last recession and that if experience here mirrors what recent UK research on small to medium sized businesses has predicted, that 25% of those on furlough are at risk of redundancy, then an additional 60,000 people could move into unemployment (increasing the rate to approximately 13%).
The paper considers a range of scenarios for recovery of the economy and jobs predicting, in an ‘Upper’ (more optimistic) scenario that unemployment could return to less than 4% by 2030 versus in a ‘Lower’ (less optimistic) scenario, that it could take thirteen years (2033) before returning to pre-crisis unemployment levels.
Also considered are the options for encouraging economic and jobs recovery including such ‘recovery actions’ as -
- Keeping young people in education for longer
- Accelerating government investment plans – (e.g. “to address infrastructure weaknesses such as lack of digital connectivity in rural areas” and “projects around energy efficiency in public buildings and homes which are critical for longer term sustainability”)
- Returning public sector staff to their town and city centre offices – which would increase footfall benefitting coffee shops, sandwich bars and local restaurants
- Adapting to changing tourism patterns – including promoting ‘staycations’ and visitors from RoI and GB with regional promotion of local markets
- FDI opportunities from near-shoring – whereby businesses choose to shorten and simplify their supply chains rather than relying on more vulnerable global supply chains, creating an opportunity for Invest NI to re-position NI as a safer location for GB and European inward investment.
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