North East gets mixed news on jobs

The North East got mixed news on jobs today, following two positive announcements yesterday.

The region’s unemployment rate fell by 0.1% compared with a month ago to 5.6%, though it remains the highest in the UK. The national average is 4.1%.

Perhaps more importantly, the economic inactivity rate fell by 0.3% to 24.8% compared with a UK fall of only 0.1% to 21.2%, and over three months was down by 0.7%, the biggest fall in the UK after the West Midlands (0.8%).  

However, economic inactivity in the region is still the highest in the UK apart from Northern Ireland and well up on the pre-pandemic level of 23.1%.

Helen Golightly, chief executive of the North East Local Enterprise Partnership, said:Today’s statistics …show that there wasn’t significant disruption at the end of the furlough scheme, but the North East continues to struggle, particularly because of rising levels of economic inactivity where people have left the labour market and are no longer looking for work. 

‘We have seen a decrease in unemployment, which would usually be good news as it means that there are fewer people looking for work, but in the last year, instead of moving into employment, people looking for work have moved into the economically inactive category’.  

At the end of 2021 there were 401,000 people aged 16-64 in the North East classified as economically inactive compared with 387,000 year earlier.

Helen Golightly added: ‘The latest data does not show the reasons for increased inactivity, but it does highlight a particularly large decrease in employment among North East women in the last year, which is concerning’. 

The number of women aged 16-64 in employment in the region at the end of 2021 was 550,000 compared with 570,000 a year earlier. The employment rate among this group is 67.1% compared with 69.3% a year earlier and it is not picking up, while the equivalent rate for men has risen from 73.5% to 75%.

Helen Golightly continued: ‘ The number of people claiming unemployment related benefits in the North East LEP area shows a monthly rise that is 6,000 higher than at the start of the pandemic. It’s the first time we have seen a rise since February 2021. 

‘We should also be concerned as this data reflects the trajectory in other recent data. The latest regional export data for Q3 2021 saw the value of North East exports decline for the third consecutive quarter. North East exports are now 7% lower than they were two years ago. 

‘We urge government to strongly focus its levelling up agenda on the needs of the North East. It is clear that whilst many other regions are moving ahead as they recover from COVID-19, the North East continues to face labour market challenges. 

‘We believe levelling up the economy is the right thing to do, but the time is now to invest in the places that need it the most.’

Jonathan Walker, policy director, North East England Chamber of Commerce said: ‘Today’s statistics are a stark reminder that just as the impact of Covid was not felt evenly across the country, there is a real danger that economic recovery will follow suit. On the face of it, our labour market is in a much better place than this time last year. However, the gap between the North East and national unemployment rates continues to grow.

‘Less than two weeks ago we saw the government launch its ‘Levelling Up’ strategy, which was heavy with analysis but light on solutions and funding. Action is needed now to help businesses get back on their feet, tackle skills gaps and address the complex issues such as poor health that prevent too many people from being able to work in our region.

‘Every time these gaps are allowed to grow is a missed opportunity that makes levelling up harder’.

TEES VALLEY

The latest figures from the Office for National Statistics (ONS) follow two announcements of new jobs coming to the region, both to Tees Valley – one from the private sector and one from the public.

Global pipe manufacturer SeAH Wind will bring a £200m-£300m monopile manufacturing facility to Teesworks in the latest ‘coup’ for the site’s growing offshore wind hub.

The firm’s 90-acre site will sit alongside South Bank Quay, and according to Tees Valley Combined Authority will create 750 direct jobs and 1,500 more in the supply chain and during construction.

Once up and running, it is claimed, it will be the world’s largest monopile plant for offshore wind turbines.

Monopiles are large steel tubes that form the foundations for the construction of offshore wind turbines. When fully operational in 2026 the site is expected to be able to produce between 100 and 150 monopiles per year.

SeAH Steel Holdings CEO and President Joosung Lee said: ‘When SeAH confirmed its UK investment, the aim was to contribute to the UK offshore wind industry by working with the UK Government. We are pleased to take the first yet significant step for this goal in Teesside. We will endeavour to make our factory globally competitive as well as become a good member of the community.’

Tees Valley Mayor Ben Houchen said: ‘2022 is our year of construction and this is another transformational project that places Teesside as the UK lead for clean, green manufacturing. SeAH is an internationally recognised manufacturing company with an incredible reputation for quality and it’s a real coup that we’ve been able to secure their investment for Teesside. Spades will be in the ground for this factory at the beginning of July…

‘Teesworks is quickly becoming a site of firsts – it’s the heart of the first UK Freeport, we’re developing the world’s first decarbonised industrial cluster thanks to Net Zero Teesside and we’re now the first area in the UK to be home to a monopile plant’.

Jacob Young, MP for Redcar, said: ‘This is yet another extraordinary demonstration that Teesside sits at the very heart of the UK’s green industrial revolution. What’s happening at Teesworks is bringing new, long-term and sustainable jobs to the people of our region.’

Also yesterday, the Department for Digital, Culture, Media and Sport (DCMS) announced that it is moving 200 staff to the Government Economic Campus at Darlington – part of a government commitment to move 22,000 civil service roles out of London by 2030.

The DCMS said the move to Darlington and other regional centres announced yesterday ‘will ensure that decisions being made about the arts, culture, sport, media and heritage better reflect the communities they impact’. 

Culture Secretary Nadine Dorries said: ‘The days of London-centric decision making belong in the past. It’s an exciting time for DCMS as we expand our regional offices and tap into a more diverse talent pool.

‘Our strength comes from our people and this will allow us to recruit the best, wherever they may be, to deliver the wide range of DCMS policies which drive growth and enrich lives all over the UK’.

COMMENT

The announcement that SeAH is to manufacture monopiles at Teesworks reinforces the cautious optimism expressed on this website on August 19, 2021, that the green industrial revolution could open the road for the North East economy to lift itself from it lagging state. But today’s labour market statistics emphasise what a long road it is that lies ahead. Levelling Up Secretary Michael Gove is wise to give himself until 2030 to achieve the 12 missions in his white paper.