North East unemployment rate falls, but inactivity continues to rise
The ONS employment figures released today (17 July 2025) show that, while the unemployment rate in the North East has fallen since the last period, economic inactivity has risen again.
Between March and May 2025, the unemployment rate in the North East for those aged 16 and over stood at 4.4%, which is 0.3% below the UK average.
However, economic inactivity among those aged 16 to 64 increased by 0.2% from the previous month, reaching 28.3%. This remains 7.3% above the UK average and underlines an ongoing challenge for the region. The employment rate for those aged 16 to 64 was 68.5%, which is 6.7% lower than the UK average.
The newly released data also highlights the reasons behind economic inactivity in the North East. Although covering April 2024 to March 2025, this data provides valuable context. Long-term sickness continues to be the most common reason for people being out of the workforce, accounting for 33.6% of the inactive population. This is 5.2% higher than the UK average of 28.4% and is the highest level in England.
The 0.1% increase in long-term sickness from the previous dataset may appear small, but it reflects a persistent issue that demands attention. Tackling ill health as a barrier to work must remain a priority, and we welcome initiatives such as the North East Combined Authority’s Economic Inactivity Trailblazer and the Tees Valley Combined Authority’s Youth Guarantee Trailblazer, alongside the UK Government’s ‘Get Britain Working’ strategy. The Chamber will continue to work with both combined authorities to promote collaborative, region-wide solutions.
The past month has also seen major national policy developments with the launch of the Modern Industrial, Infrastructure and Trade Strategies. Together, these strategies present a welcome opportunity for the North East, particularly the confirmation of an integrated funding settlement for the North East Combined Authority from 2026. This enables more joined-up, place-based decisions in areas such as transport, skills and housing.
We also welcome the Infrastructure Strategy’s focus on connectivity and investment in strategic transport and digital networks. Both are essential for boosting productivity, attracting investment and creating jobs in the region.
The Trade Strategy, which addresses priorities such as clean energy and customs reform, aims to remove barriers to international trade and help UK businesses compete globally. However, as with the Industrial Strategy, delivery is what matters most. Businesses need to see these plans translated into meaningful and measurable progress.
We remain committed to unlocking the North East’s potential and to ensuring our region’s voice is heard. We will continue to champion North East business because We ARE North East business.
