North East Devolution and Levelling Up
Penshaw Monument

Jobs: North East edging up but still lagging

North East unemployment fell by more than the national rate in the latest three-month period and economic inactivity saw one of the largest falls in the UK. But the regional unemployment rate remains the highest in the UK and economic inactivity is still the highest apart from Northern Ireland.

Quarterly figures released today by the Office for National Statistics (ONS) show North East unemployment for March-May at 5.1%, down 0.3% compared with December-February. The UK rate is down 0.1% to 3.8%.

The North East’s economic activity rate (those not in work or seeking work) saw one of the largest falls in the UK over the same period, down by 0.9% to 24.8%. The North West also saw a fall of 0.9%, to 22.4, and only Yorkshire & the Humber enjoyed a larger fall – down by 2.3% to 22.0%. The UK inactivity rate fell by 0.4% to 21.1%.

The falls in unemployment and economic inactivity combined resulted in the North East enjoying the largest increase in employment rate in the UK apart from Yorkshire & the Humber. The rate is up by 1.2% and now stands at 71.5%, but is still significantly below all other regions apart from Northern Ireland on 70.1%.

Measured over a longer period, however, when compared with the same period last year most regions of the UK saw an increase in the employment rate, with the only decrease seen in the North East, down 0.2%, according to the ONS. So recent improvements are needed to make up for earlier losses.

Richard Baker, Strategy and Policy Director at the North East Local Enterprise Partnership (NELEP), said: “The data released today shows that recent employment trends in the North East region have continued to improve, with an additional 11,600 people in employment compared to the previous quarter and a larger increase in the employment rate than nationally.

“The statistics also show a decrease in the region’s economic inactivity rate during the last quarter that is larger than nationally, and a continuing high level of labour market demand. However, there remains a challenge to ensure the North East labour market is working for all age groups with younger and older workers not securing employment at the same rate as other groups.

“PAYE data shows that the region’s median employee pay is increasing at a similar rate to nationally (up by 5.3% in the year to May 2022), which is faster than the pre-COVID trend, but tracking below inflation.

“Whilst it’s encouraging to see positive changes continue into this quarter, our economy continues to face challenges, particularly around the tightness of the labour market for employers and cost of living for residents. We can expect continuing volatility over the coming months and there will continue to be a need for support for business in navigating these headwinds and for families and communities facing increasing prices.”