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Regional unemployment equals record low, but inactivity rises

North East unemployment has fallen to 4.4%, matching its record low, and is no longer the highest in the UK. But the region’s economic inactivity rate has risen in line with the national picture, with the result that the employment rate is down.

Figures from the Office for National Statistics (ONS) today show unemployment in the North in the June-August quarter to be 4.4%, compared with the UK figure of 3.5%.

Unemployment in the region is now below that in the West Midlands, where it stands at 4.7%.

The North East rate fell in the quarter by 0.6% compared with March-May while the national rate fell by 0.3% and that in the West Midlands rose by 0.3%. The East Midlands, South East and Northern Ireland also experienced increases, though their rates remain below the North East’s.

Economic activity – measuring those not in work and not seeking work – rose by 0.6% in the North East, exactly in line with the national average. Regional inactivity at 25.5% remains the highest apart from Northern Ireland.

The North East employment rate fell 0.3%, again matching the national average, and is the lowest apart from Northern Ireland.

Unemployment in the North East was at 4.4% in June-August 2018 but has not otherwise been so low since records became available in 1992.

REACTION

Helen Golightly, Chief Executive of the North East Local Enterprise Partnership (NELEP), said: ‘The data released today shows the labour force in the North East is following a similar pattern to the rest of England.

‘It is a cause for concern that both nationally and in the region we have seen the number of people in employment fall, unemployment fall and further growth in the number of people becoming economically inactive – where they are not looking for work.

‘There is also evidence of the number of overall jobs available falling from previous high levels, especially in businesses employing fewer than 50 people.

‘Nationally and regionally the labour market is slowing. There are currently 71.2% of people aged 16-64 in work, but the region still hasn’t recovered to pre-COVID levels of employment.

‘At this time, people and businesses are focused on the cost of living and costs of doing business given rises in inflation and interest rates.

‘PAYE data which has been released today shows that nationally employee pay continues to increase at a rate of 5.4% (excluding bonuses), at a time when costs of living in areas like energy and food are increasing at a higher rate. National data suggests that the impact on real terms pay is a decrease of about 3%. As we head into winter this will be an issue of great concern for both residents and employers.

‘We welcome the decision by the Chancellor to bring forward the planned budget statement to the end of the month as it is clear that the economy requires ongoing support to return to sustainable growth and to provide support to businesses and residents through current uncertainty.’

The North East England Chamber of Commerce said: ‘The ONS employment figures for October show that gaps between the North East and the rest of the country are still concerning.

‘Between June and August, the unemployment rate in the North East for those aged 16+ was 0.9% higher than the national average. Similarly, the economic inactivity rate for people aged 16-64 in the North East remained higher than the national average, by 3.8%. The North East’s employment rate for those aged 16-64 was 4.3% lower than the national average.

‘In the North East, the unemployment rate has improved by 0.8% compared to June-August last year. However, the employment rate is 0.1% lower, and economic inactivity has worsened by 0.8%.

‘Even compared to last month’s employment statistics, the North East’s economic inactivity rate has worsened by 0.2%. This shows more needs to be done to help people access the job market.

‘The new government has set out its plan, which includes addressing the NHS backlog and helping people into work. For the government’s growth strategy to succeed, it must be inclusive of those who are struggling to access the labour market.’