Northern Ireland is recovering at a much slower pace from the recession than previously hoped and currently has the highest number of people out of work in the 12 UK regions including Scotland and Wales according to latest government statistics.

The June labour market report shows the number of people claiming jobless related benefits fell last month by 900 to 54,300 while the unemployment rate dropped to 6.7 per cent in the three months to May to leave 59,000 people out of work.

But while the official government figures suggest that the North is on its way back to work as far as the economy is concerned they also show that 555,000 people were estimated to be economically inactive - not in work or not looking for a job.

Richard Ramsey, chief economist, Northern Ireland, Ulster Bank said the figures conceal disparities.

“Youth unemployment remains above 20 per cent. Indeed, when looking at employment growth over the last year, the 18-24 age group has seen a fall in employment of some 8,000 people.

“So, as far as recovery is concerned, some age groups, notably young people, are still waiting for it to happen,”Mr Ramsey said.

Meanwhile results from the experimental Northern Ireland Composite Economic Index (NICEI) - which measures local economic performance, also released yesterday -highlighted that economic activity decreased by 0.4 per cent to the end of quarter one.

According to Dr Esmond Birnie, PwC chief economist in Northern Ireland, the index suggests that recovery is both fragile and slow and that the downturn is much deeper than in the rest of the UK.

“The impact of the property collapse has inhibited domestic spending, public sector spending cuts have inhibited investment and the proportionally smaller private sector cannot either invest or export enough to close the gap,” Dr Birnie said.