Northern Ireland's jobless total fell by 3,000 to 44,000 in the third quarter of last year, according to new figures from the North's statistical agency.

Unemployment in Northern Ireland now stands at 5.6 per cent of the workforce, a lower proportion than in four other UK regions, including London.

The overall unemployment rate for the UK remained unchanged at 3.1 per cent at the end of 2002, despite the number of people claiming the dole falling to its lowest level since 1975.

Mr Ian Pearson, the Northern Ireland Minister with responsibility for Enterprise, Trade and Employment, did not overtly welcome the decline in the Northern Ireland rate, choosing instead to highlight the 3,000 redundancies which remain in the North's pipeline.

Mr Philip McDonagh, chief economist with PricewaterhouseCoopers in Belfast, said the 3,000 "pipeline" redundancies, which come largely in the IT, aviation and telecoms sectors, could add about 1,000 to overall jobless figures when factors such as retirement were stripped out.

Mr McDonagh said the falling unemployment rate was, "on the face of it", good news but pointed out that as the number of people designated as "unemployed" had declined, the number of "economically inactive" people had remained high.

About half a million people currently fall into this category, with 90 per cent of these stating that they do not want a job.

About 40 per cent of the unemployed population has been out of work for more than one year, while the unemployment rate for the 18- to 24-year-old age group is 12 per cent.

Mr McDonagh said that as long as foreign direct investment continued to wane in Northern Ireland, unemployment levels would remain under pressure.

He expects the unemployment rate to remain steady this year but admits that political instability, among other factors, could drive it upward.

Meanwhile, figures for manufacturing in the North over the third quarter, also released yesterday, point to a 2 per cent annual decline in activity.