Economic inactivity remains one of Northern Ireland’s most persistent labour market challenges, but the latest Department for the Economy analysis shows clearly that the issue is not evenly distributed across the region.

In 2025, the economic inactivity rate in Foyle stood at 33.2%, well above the Northern Ireland average of 24.1%, while Derry City and Strabane recorded the highest inactivity rate of any local government district in Northern Ireland. East Londonderry also remained comparatively high at 31.7%.

For the North West, these figures underline the importance of looking beyond Northern Ireland-wide averages. They also strengthen the case for a more targeted approach to regional labour market policy, particularly where economic inactivity overlaps with health, skills and access to employment.

Economic inactivity does not mean unemployment. It includes people who are neither in work nor actively seeking work, including students, people with long-term health conditions or disabilities, carers and some retirees.

Students are particularly important to this distinction. Across Northern Ireland, the economic inactivity rate falls from 24.1% to 18% when students are excluded. In a region seeking to expand higher education provision and grow its student population, participation in education should therefore be viewed differently from longer-term detachment from the labour market.

The deeper challenge lies in the reasons behind inactivity.

Long-term sickness or disability is the single largest contributor, accounting for 38.8% of economically inactive people in Northern Ireland, compared with 33.2% across the UK. The composition of health-related inactivity is also changing. The proportion of economically inactive people reporting mental health or learning conditions increased from 26% in 2015-16 to 34% in 2024-25.

Skills are another important factor, only 9.8% of economically inactive people hold a degree or higher qualification, compared with 40.5% of economically active people. Meanwhile, 25.1% of inactive people have no formal qualifications, almost four times the proportion among those who are economically active.

For employers, a larger and more accessible labour supply can help ease recruitment pressures, while better alignment between skills provision and employer demand can strengthen productivity and economic growth. The Department’s analysis itself identifies re-engaging economically inactive people as an important part of addressing future skills imbalances.

For the North West, the key lesson is that economic inactivity cannot be addressed through employment interventions alone. The scale and complexity of the challenge require a more place-based response, bringing together health, skills, employability and economic development.

If regional balance is to be meaningful, the areas experiencing the highest levels of inactivity will require policy responses designed around their particular barriers rather than a uniform Northern Ireland-wide approach.

You can read the full Economic Inactivity in Northern Ireland: A Demographic and Regional Analysis, Sept 2026