Chamber comment on employment stats

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The ONS employment figures released today shows a steep decline in employment regionally, whilst nationally employment is on the rise. Once again, regional gaps are widening.

Between October and December 2022, the unemployment rate in the North East for those aged 16+ was 0.8% higher than the national average. Similarly, the economic inactivity rate for people aged 16-64 in the North East remained higher than the national average, by 4.3%. The North East’s employment rate for those aged 16-64 was 4.6% lower than the national average.

In the North East, the employment rate has worsened by 0.5% compared to July-September 2022. Economic inactivity has also worsened by 0.5%, as has the unemployment rate has increased by 0.2%.

This is concerning for the North East, as nationally we are seeing vacancies sharply decline. Consequentially, for those who have left the labour market, it will be harder to re-enter the workforce both due to the number of jobs available, and increased competition.

Our Quarterly Economic Survey covering October to December 2022 shows that staff costs are North East businesses’ third highest concern. When you couple this with the fact that employment has fell, it could suggest that vacancies aren’t being filled, and instead businesses are looking to manage their outgoings.

One of Prime Minister Sunak’s five pledges for 2023 that he is openly happy to be judged on at the end of the year, is to grow the economy and create more high-wage jobs. If regional inequalities are not addressed as part of this, it would be a devastating blow for Levelling Up in the North East. We already know that the North East has a real strength in seizing opportunities, as last year we created more jobs through inward investment outside of London than any other English region.

What matters in the short term is that businesses are helped to survive the challenges they face. In our latest budget submission, we have called for the Government to work closely with OFGEM to make sure savings are passed directly to businesses should wholesale energy prices continue to fall. As a Chamber we will continue to explore ways in which we can best support and represent our members.

Notes

Data published by the ONS shows between October-December 2022, the unemployment rate in the UK for ages 16+ was 3.7%. In the North East this was higher, at 4.5%.

The UK’s employment rate for ages 16-64 was 75.6%. In the North East this was lower, at 71%.

The UK’s economic inactivity rate for ages 16-64 was 21.4%. In the North East this was higher, at 25.7%.

Labour market comment from the Chamber

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Arlen Pettitt, knowledge development manager, North East England Chamber of Commerce said: “There are some signs of improvement from the first three months of this year, as employment increased and unemployment fell, but we still have a gap to the rest of the country.

“The national picture may show unemployment at the lowest levels since 1974, but the North East story is different, with the highest unemployment rate, lowest employment rate and highest economic inactivity rate in England. Closing the gap to the national averages will be one of the key measures of the Government’s levelling up agenda.

“Businesses are telling us that costs are their main concern – inflation, energy, taxation, and pressure the cost of living is putting on staff pay. There was nothing in last week’s Queen’s Speech which addressed the urgency of these issues, and we need to see the Government’s act quickly to make sure the tentative improvement we’ve seen continues through the rest of 2022.”

Notes:

Employment in the North East stands at 1,199,000, a rise of 12,700 (1.1%) over the quarter but a fall of 8,700 (0.7%) over the year. The North East employment rate stands at 70.9%. This compares to a rate of 75.7% nationally.

North East unemployment stands at 62,700, a fall of 7,400 (10.6%) over the quarter and a fall of 10,700 (14.6%) over the year. The North East unemployment rate stands at 5.0%. This compares to a national rate of 3.7%.

Economic inactivity in the North East for those aged 16-64 stands at 408,000, an increase of 7,300 (1.8%) on the quarter and 28,300 (7.5%) on the year. The North East economic inactivity rate stands at 25.2%. This compares to a national rate of 21.4%.

The seasonally adjusted claimant count stands at 72,700 in the North East. This is a fall of 3,800 (5.0%) over the month and a fall of 42,500 over the year (36.9%). The claimant count rate for the North East is 5.2%.

The employment data covers the period January to March 2022. The provisional claimant count data is for April 2022.

Chamber response to employment statistics

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Arlen Pettitt, knowledge development manager at the North East England Chamber of Commerce said: “Unfortunately, the North East is once again the economic outlier. While across the rest of the country unemployment rates are falling, ours has remained static. And while nationally we’re talking about a fragile but sustained recovery, in the North East the figures don’t support that.

“Our region’s employment rate has fallen and, critically, our economic inactivity rate – which includes those with caring responsibilities and with temporary or long term illness – has increased. That’s out of step with the rest of the UK, and represents a big challenge for the region.

“With restrictions returning with the arrival of the Omicron variant, it’s vital that businesses are supported and jobs protected, especially in those sectors – like retail and hospitality – which are most vulnerable to what is set to be another very difficult Christmas period.”

Key statistics:

  • Employment in the North East stands at 1,138,000, a fall of 31,000 (2.7%) over the quarter and a fall of 22,000 (1.9%) over the year. The North East employment rate stands at 70.3%. This compares to a rate of 75.5% nationally.
  • North East unemployment stands at 66,600, a fall of 800 (1.2%) over the quarter and a fall of 16,500 (19.9%) over the year. The North East unemployment rate stands at 5.3%. This compares to the national rate of 4.2%.
  • Economic inactivity in the North East stands at 416,000, an increase of 28,000 (7.2%) over the quarter and 32,500 (8.5%) over the year. The North East economic inactivity rate stands at 25.7%. This compares to a rate of 21.2% nationally.
  • The claimant count stands at 89,600 in the North East. This is a fall of 2,100 (2.3%) over the month and a fall of 30,700 (25.5%) over the year. The claimant count rate for the North East is 6.2%, compared to 4.9% nationally. 

Chamber statement on today’s labour statistics

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Niamh Corcoran, policy adviser, North East England Chamber of Commerce said: 

“Statistics show, once again, that the region is recovering from the economic crisis, with the unemployment rate declining by 1.3% over the year, the largest change in the country. While unemployment has decreased, employment levels are recovering at a slower pace, having fallen by 2.1% over the year. In part, this may be explained by a decline in migration and a decline in older women, men in their 50s, and students entering the workforce- partly due to ill health.

“Nationally, job vacancies have hit a twenty-year high of 1.1 million in the last quarter. There is a risk that acute staff and skills shortages will stall the region’s economic recovery. To support businesses in finding the skilled workers they need, Government needs to add jobs to the Shortage Occupations List and create temporary migration routes for workers from overseas. 

“A significant effort is also needed to improve the quality and quantity of the domestic labour force. Government should tackle the barriers to training and employment that many face, such as ill-health or caring responsibilities. In addition, targeted employment support is needed for the long-term unemployed, as well as individuals who are frequently left out of the labour market, such as those who are disabled or older. 

“To ensure the workforce can meet future business skills needs, companies must invest now in employee skills and work more closely with education providers to develop a strong local talent pipeline.”

Statistics:

Employment in the North East stands at 1,157,000, a fall of 10,000 (0.9%) over the quarter and a fall of 10,000 (0.9%) over the year. The North East employment rate stands at 71.5%. This compares to a rate of 75.3% nationally.

North East unemployment stands at 66,000, a fall of 9,000 (11.6%) over the quarter and a fall of 19, 000 (22%) over the year. The North East unemployment rate stands at 5.2%. This compares to a national rate of 4.5%.

The claimant count stands at 96,300 in the North East. This is a fall of 1,600 (1.6%) and a fall of 26,300 over the year (21.4%). The claimant count rate for the North East is 6.7%.

The employment data covers the period June to August 2021. The provisional claimant count data is for September 2021. The next release is the 16th November 2021.

Chamber comment on today’s employment statistics

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Niamh Corcoran, policy adviser, North East England Chamber of Commerce said: ”This month’s labour market statistics show positive signs of recovery, with the North East seeing unemployment levels falling by 15.1% over the last quarter.  

“However, employment levels dipped by 0.5%, suggesting there is still more ground to make up to ensure the labour market’s full recovery. National and more timely data shows that the number of UK workers on a company payroll has increased by 241,000 in August, returning the country to pre-pandemic levels.  

“Whilst many of the indicators in today’s dataset suggest there is room for optimism, we are not out of the woods yet. With the end of the Furlough scheme fast approaching and a million workers and businesses still relying on the scheme, it is likely there will be an uptick in unemployment in the Autumn.”