BELFAST BRIEFING:Like other small towns in mid-Ulster, Cookstown is bearing the brunt of the downturn, writes Francess McDonell.

THERE IS no mistaking the sentiment on one of the longest and widest retail streets in the North.

Cookstown's main thoroughfare, known in some circles as the One Mile Street, is bedecked with Christmas decorations. But despite the festive trimmings, there is little cheer in this Co Tyrone town.

Like many in the mid-Ulster area, it has experienced a sharp increase in locals out of work.

Government statistics suggest the number claiming unemployment-related benefits in Cookstown has more than doubled in the past year. It does not help that house prices in the area have also dropped dramatically after historic highs in the past two years. According to the University of Ulster, the average price of a house in mid-Ulster has fallen by 43.9 per cent in the past 12 months.

As 2007 was drawing to a close, the price of an average house in mid-Ulster was estimated to be about £292,931 (€311,994). Today the research suggests it is closer to £164,317. The psychological impact of such a decline and the rising swell of redundancies in Cookstown mean most people feel there is little to celebrate.

And it is not just this Tyrone town that is feeling downcast about Christmas. Cookstown provides a window on what is happening right across the North this year. The combination of the credit crunch, economic slowdown and accelerating pace of redundancies means the festive spirit is in short supply.

Many towns like Cookstown - too far inland to enjoy the benefits of euro-shoppers crossing the Border - are struggling to entice local shoppers to part with their cash. Sale signs compete with Christmas decorations in store windows in a bid to lure shoppers through the door.

In common with many rural towns, Cookstown has attracted little foreign direct investment down the years. The majority of local businesses are small family-owned concerns. There are few manufacturing companies, though a significant number of construction-related firms are based around the town. These include McAleer Rushe, one of the North's leading construction and property development firms.

No one in the construction sector has been immune to the slowdown in the North but some are feeling it more keenly than others. When local companies such as Cookstown-based Keystone, a steel lintel manufacturer, make 30 people redundant, it has a much greater impact on the community.

Richard Ramsey, Ulster Bank's Northern Ireland economist, says mid-Ulster's exposure to the construction industry is the reason it has experienced one of the sharpest rises in unemployment rates in the North.

He says construction is continuing to bear the brunt of the cuts in percentage terms. "The job losses are particularly apparent in the housebuilding sector, which is in the midst of its worst downturn on record," he says.

Ramsey fears labour market statistics for November, which recorded the highest monthly increase in unemployment in the North for almost 30 years, may be disguising how bad the situation really is in the construction sector.

Overall, the sector in Northern Ireland recorded a fall of 1,600 jobs in the third quarter of 2008. But Ramsey says: "Given that these figures exclude self-employment, it should be remembered that they vastly underestimate the job losses and level of self-employment in the North's construction industry."

Ramsey says the soaring number of people claiming unemployment-related benefits is a cause for concern and he expects it to get worse. He predicts the overall claimant count in the North could rise to 50,000 or higher next year - a level that would spell disaster for small rural towns like Cookstown.

Patsy McGlone, SDLP Assembly member for mid-Ulster, says the rise in the number of firms laying people off has already caused hardship for families.

"We are very reliant on the construction sector in this area and people are concerned about the future. There is a big difference in the local economy now compared to what it was like even this time last year," he says.

"Eighteen months ago we were hoping for a rosy future, but that has all changed now. What we are dealing with now is an increasing number of enquiries from people about social security benefits - particularly from people who have never been unemployed before."

McGlone adds: "We are seeing what happens when the breadwinner loses his or her job. It is a difficult place to be right now and we are very worried about what 2009 may bring."