New data underscores ongoing pressures on North East employment and inactivity

Jessie Kelly-Baxter, policy manager at the North East Chamber of Commerce, said:

“The ONS employment figures released today (18 June 2026) show that, while the North East’s unemployment rate has fallen compared to last month, the region’s economic inactivity rate has increased by 1.3%, meaning the North East continues to face higher levels of economic inactivity than the UK average.

Between February and April 2026, 25.1% of people aged 16 to 64 in the region were economically inactive. This is 4.1% above the national average, meaning the North East continues to record the highest economic inactivity rate in England.

Unemployment levels for those aged 16 and over in the region are now 5.4%, a 0.1% reduction on last month’s figures. This reflects the national picture, with the UK unemployment rate also falling by 0.1% to 4.9%, although the North East remains above the national average.

The employment rate for working-age people in the North East is now 71.1%, which is 3.9% below the national average and the lowest rate in the UK. This is a 0.9% fall compared to last month’s figure of 72%.

While the fall in unemployment is welcome, the continued increase in economic inactivity highlights the scale of the challenge facing the region. It is important the North East maintains the progress seen in previous months, when employment rates had been improving.

We know that long-term sickness is a key reason why economic inactivity in the North East remains consistently high. Data on the reasons for economic inactivity between January and December 2025 shows that 32.7% of economically inactive adults in the region are inactive due to long-term health conditions.

Policymakers are increasingly attuned to the role of long-term sickness in shaping labour market outcomes, and this recognition must now translate into practical support that helps more people access and remain in good work.

Across the North East, a range of policy interventions are focused on reducing economic inactivity and supporting more people with health conditions into employment. The North East Chamber of Commerce led the employer strand of the Economic Inactivity Trailblazer, working closely with employers, partners and stakeholders to develop a strong evidence base on the challenges facing the region.

The priority now is for the North East Mayoral Strategic Authority (NEMSA) to build on this insight and drive forward practical solutions that improve employment outcomes.

In the Tees Valley, the Chamber led the Local Skills Improvement Plan (LSIP) in partnership with the Tees Valley Combined Authority. We look forward to seeing continued progress in addressing skills gaps, supporting business growth and increasing economic participation across the region.

The Chamber’s recent People Report reinforces the importance of placing people at the heart of inclusive economic growth. Through engagement with members across the region, the report highlights how employers are adopting innovative workplace practices, including flexible working, four-day working models and more inclusive recruitment approaches, to attract, retain and develop talent.

These approaches not only support employee wellbeing, engagement and retention, but also help to widen participation in the labour market by creating opportunities for people who may otherwise face barriers to work.

As employers continue to respond to workforce challenges, inclusive employment practices will play a vital role in expanding the region’s talent pool, reducing economic inactivity and ensuring economic growth is both sustainable and inclusive.”

Notes

- Official statistics under review published by the ONS suggest that between February and April 2026, the unemployment rate in the UK for people aged 16 and over was 4.9% In the North East, this was higher at 5.4%.

- The UK’s employment rate for ages 16-64 was 75%. In the North East, this was lower, at 71.1%.

- The UK’s economic inactivity rate for ages 16-64 was 21%. In the North East, this was higher at 25.1%.