Unemployment drops for second month in encouraging sign for regional economy
Date published:
Josh Maratty, policy adviser at the North East Chamber of Commerce, said:
“The ONS employment figures released today (19th May 2026) show that between January and March 2026, the unemployment rate in the North East for people aged 16 and over was 5.5% (compared to 6.1% last month) – now 0.5% higher than the UK average.
The drop from 6.1% to 5.5% represents a meaningful improvement, suggesting the North East labour market is gaining momentum. However, sitting 0.5% above the UK average means the region continues to face structural employment challenges that have historically persisted here.
For workers it means more people are finding jobs, but for policymakers it’s a reminder that the North East and its businesses, which are the backbone to the region’s economy, still need targeted investment and support to fully close the gap with the rest of the UK.
Economic inactivity among those aged 16 to 64 was 23.8%, an improvement of 0.3% compared with the previous month. The rate remains 2.9% higher than the UK average and still means around one in four working-age adults in the North East is economically inactive.
The employment rate for those aged 16 to 64 rose to 72% from 71.3% the previous month, which is now 3% lower than the UK average.
Vacancy levels continued to fall in early 2026, with an estimated 705,000 positions available in February to April, down 28,000 (3.9%) on the previous quarter and the lowest figure since 2021. The decline was widespread, affecting 11 of 18 industry sectors, with retail and wholesale seeing the sharpest drop. Year-on-year, vacancies are down 7.1%, reflecting a cooling jobs market. Despite this, the ratio of unemployed people to available roles held steady at 2.5, a sign that, while opportunities are shrinking, competition for jobs has at least stopped intensifying.
While the headline figures paint a challenging picture, it’s worth remembering that official vacancy data only captures part of the labour market. A significant proportion of roles are never formally advertised, filled instead through networking, internal promotions or direct approaches, and a single job listing can often represent multiple positions. The true number of opportunities available to job seekers is therefore likely to be higher than the statistics alone suggest.
The Chamber recently welcomed a roundtable with the Department for Business & Trade where members discussed their experiences around parental leave and pay and provided feedback on the development of the system. The reformation of the current system is vital to supporting businesses, particularly SMEs, in their maternity and paternity support, taking the cost and administrative burden off them to allow for fair and inclusive growth, benefiting the wider business ecosystem.
With the dust settling on the recent local elections, we look forward to building strong, constructive relationships with new and re-elected councillors, leaders and their administrations during their term in office.
In recent years, the North East has benefited from a strong and growing spirit of collaboration between business, voluntary, community and social enterprise (VCSE), local authorities and regional leadership through the Tees Valley Combined Authority and the North East Mayoral Strategic Authority, and this partnership approach has been key to building investor confidence, supporting job creation and ensuring the region speaks with a clear and credible voice on national and international stages.”
Notes
- Official statistics under review published by the ONS suggest that between January and March 2026, the unemployment rate in the UK for people aged 16 and over was 5%. In the North East, this was higher at 5.5%.
- The UK’s employment rate for ages 16-64 was 75%. In the North East, this was lower, at 72%.
- The UK’s economic inactivity rate for ages 16-64 was 20.9%. In the North East, this was higher at 23.8%.
- The ONS continues to use experimental data following issues with data collection, which made employment figures unavailable for a period. For more details on the ONS’ switch from experimental data to official statistics under review, please click here.