North East payrolls recover to pre-Covid levels

The North East is one of four UK regions that now has more payrolled employees than before the start of the coronavirus pandemic – up by an ‘encouraging’ 12,000 in June. Labour and skills shortages are now starting to emerge as problems according to the North East England Chamber of Commerce.

For the first time since the start of the pandemic the region, including Tees Valley, had more payrolled workers in June 2021 than in February 2020, as did the North West, East Midlands and Northern Ireland according to figures released today by the Office for National Statistics (ONS) and HM Revenue and Customs  (HMRC).

Every region except London had its lowest number of payrolled employees since the start of the pandemic in November 2020, while London did not have its lowest count until February 2021; London is the region that still has the furthest to recover, with payrolled employees still over three per cent below pre-pandemic levels.

The North East, however, started from a relatively low employment base, and unemployment remained unchanged in the latest three-month period (March-May) at 5.8% compared with December 2020-February 2021 and was second highest in the UK after London. The North East’s March-May jobless figure was down by 0.1 per cent compared with February-April.

Over the March-May period the North East employment rate remained unchanged compared with December-February at 72%, the lowest apart from Northern Ireland, and the economic inactivity rate was up 01.% at 23.6%, the highest apart from Northern Ireland.

Richard Baker, policy director at the North East Local Enterprise Partnership (NELEP), which covers Northumberland, Tyne & Wear and County Durham, but not Tees Valley said:


‘ONS continue to innovate with new data approaches to provide more up to date intelligence to support assessment of the economy, for example, a new experimental measure of payrolled employees. This suggests a more positive picture with the latest monthly estimate showing there was an increase of almost 12,000 payrolled employees in June. This is encouraging and we will monitor how this new data set develops given it is subject to revision and excludes information about self-employed workers.

‘Beneath the general figures, Covid-19 continues to have an impact on the working lives of many people in the North East region and appears to be exacerbating inequalities. Whilst people were securing new jobs and there is growth in vacancies, about 4,400 workers experienced redundancy in the latest quarter, more than twice the total in the previous quarter and bringing the total to over 32,000 since March 2020. The latest data shows a particular impact on women in the North East with female employment falling by 3,600 in the latest quarter, in contrast to a 2,800 increase among males.

‘Job seekers claimant count data provides indications of the variations of unemployment within the North East LEP area. At constituency level, the rates range from 2.8% in Hexham to 9.0% in South Shields.

‘At the end of May, almost 63,000 workers in the North East LEP area were still furloughed, with workers in food and accommodation services still making up almost a quarter of this figure. Manufacturing accounted for 11,000 of the furloughed workers, a total that did not drop during those three months.

‘This provides a strong rationale for the Levelling Up agenda with support needed to the North East as a whole and for places within the region. Over the longer term, our Recovery Plan sets out proposals to drive forward our vision of a more sustainable, competitive and inclusive regional economy. As the Prime Minister outlines the next steps with for the Levelling Up strategy, the North East LEP will continue to work with Government and our partners to provide support to our regional economy as we work through the recovery phase to seek investment into these proposals.’

The North East England Chamber of Commerce’s Niahm Corcoran said: ‘Labour and skills shortages are beginning to emerge, with firms in sectors like hospitality and logistics struggling to recruit the staff they need. In addition, long-term unemployment is an increasingly concerning problem in the labour market, particularly for older and younger workers,

“As the July reopening gets underway, government should continue to increase investment in adult education so those in unemployment can rapidly retrain and upskill and ensure that jobcentres have the resources they need so that those looking for new opportunities can be fully supported into work. Not only this, but with the impacts of the immigration system beginning to bite, government will need to assess whether the system is flexible and accessible enough for businesses to recruit the talent they need to grow and, where necessary, make urgent changes.’