North East jobs market heading the wrong way again

The North East has almost regained its position as the region with the highest unemployment in the UK while at the same time seeing more people who are economically inactive – i.e. have left the labour market and are not actively seeking work. –

The result of these combined factors is that the region has a significantly lower employment rate – those with jobs – than any other region and the lowest rate for this region for more than five years.

Today’s figures from the Office for National Statistics, which cover the three months August-October, show an unemployment rate for the North East of 5.3%, the second highest after London, which is on 5.4%.

The North East’s jobless rate is unchanged since the previous three-month period (May-July) and it is the only region not to have seen a fall. London has been closing the gap since September, and now has unemployment only 0.1% above the North East.

Economic inactivity in the North East, meanwhile, rose by 1.7% in the latest quarter, which is the biggest increase in the UK, ahead of Northern Ireland (1.1%) and Yorkshire and the Humber (0.9%). The North East rate now stands at 25.7%, behind only Northern Ireland on 26.9%.

Taking these statistics together, the North East employment rate is now 70.3%, the lowest in the UK and significantly below the UK average of 75.5%. The North East rate is the lowest since January-March 2016.

(Employment and economic inactivity rates are based on the number of people in the population aged 16-64; the unemployment rate is based on the number of people aged 16 and over).

Helen Golightly, chief executive of the North East Local Enterprise Partnership (NELEP), said: ‘For the third month in a row we have seen a decrease in the employment rate, meaning there are fewer people in work, but more significantly, an increase in the economic inactivity rate, which is the number of people who have left the labour market and are not actively looking for work.

‘This has increased more than any other English region and the gap between the North East and the next English region (Yorkshire and the Humber) is significant.

‘The North East region has an additional 33,000 working age people who are inactive compared to the same period in 2020. Recent increases in inactivity have been particularly large among the youngest workers, but there have also been increases among those aged 35 to 64.

‘There is more work to do to understand the detail behind these changes, but it is now apparent that because the North East region has the highest inactivity rate across all regions in England, we need to work with government to ensure a swift implementation of the Skills White Paper and to ensure the Levelling Up White paper is published and progressed early in 2022 with no further delays.’

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.’