Economic inactivity remains a critical issue for the North East economy
Date published:
Marianne O’Sullivan, policy manager at the North East Chamber of Commerce, said:
The ONS employment figures released today (20 March 2025) show that the North East has the highest rate of economic inactivity in England at 26.1%. The North East continues to face higher levels of economic inactivity than the UK average, presenting a key issue for the region’s economy.
Between November 2024 and January 2025, the unemployment rate in the North East for those aged 16+ was 4.7%, which is 0.3% higher than the UK average. However, this represents a decrease of 0.3% compared to the figures released last month for the North East.
At the same time, economic inactivity for those aged 16-64 in the North East has increased by 0.1% compared to the figures released last month, rising to 26.1%. This is 4.6% above the UK average of 21.5%.
The North East’s employment rate for those aged 16-64 was 70.5%, an increase of 0.2% compared to the figures released last month. The North East’s employment rate is 4.5% lower than the UK average of 75%.
The ONS has stated some volatility remains in its data collection method, specifically the Labour Force Survey, due to small sample sizes. Nevertheless, these figures underscore the North East’s persistent challenges of overall higher economic inactivity and unemployment.
We urgently need to tackle the high levels of economic inactivity in the region. Helping people get into work and stay in work is our members’ top priority to help grow the region’s economy.
Ahead of the Chancellor’s Spring Statement next week, the government needs to outline how it will support people into work and support employers to invest, recruit and grow.
Our members need certainty that the funding for the trailblazers announced in the Get Britain Working White Paper will continue past 2026 to support people to both take up and stay in work in the region. We also need to ensure that the government’s proposed welfare reforms do not increase the already high poverty rates in the North East.
Health-related tax incentives for small and medium-sized businesses would enable our members to provide access to additional healthcare and better occupational health support for their staff, helping people to stay in work.
A recently published report as part of the Chamber’s Local Skills Improvement Plan (LSIP), has highlighted that 23.1% of adults in the North East are functionally illiterate. The government needs to make funding available to address the issue in communities to allow people to access job opportunities in the North East.
Businesses across the region are preparing for the imminent hike in employment taxes. The government needs to set out how it will support job creation and drive economic growth across the North East amidst rising cost pressures for businesses.
We are North East business, and we will continue to work with our members, the Combined Authorities in the region and the Government to reduce economic inactivity and drive growth in the North East.