North East Devolution and Levelling Up
Penshaw Monument

Unemployment down, but so is activity

North East unemployment has fallen again to reach its lowest level for four years. But it is still the highest in the UK, and at the same time the number of people dropping out of the labour market altogether has risen, according to figures today from the Office for National Statistics.

Unemployment in the region was 5% in the three months January – March, a fall of 0.6% compared with the previous three-month period (October – December 2021). The UK rate is 3.7%.

Regional unemployment is now at its lowest since July-September 2018, when it was 4.9%. Viewed in the longer term, apart from 2018 the jobless rate in the region is lower than at any time since the current dataset started in 1992. It peaked at 13.5% in 1993.

However, the fall in unemployment in the North East has been driven largely by a rise in the economic inactivity rate – people aged 16-64 not in work and not looking for work. This rose by 0.4% compared with the previous three months to 25.2%, the highest level apart from Northern Ireland. The UK rate rose by 0.1% to 21.4%.

The North East employment rate for 16-64-years-olds of 70.9% is the lowest in the UK. Compared with this time last year employment in the North East is 1.1% lower: the only region in the UK to see a decrease in the employment rate.

The proportion of people claiming out-of-work benefits in the region in April was 5.4%, the highest apart from the West Midlands on 5.5%. The regional claimant count peaked in August 2020, during the pandemic, at 8.7% but has been coming down in an almost steady line. It is now a little above its pre-pandemic level of 5.2% in March 2020.

Helen Golightly, chief executive of the North East Local Enterprise Partnership (NELEP), said: ‘This month’s figures show a large increase in employment in the North East, with the total rising by almost 13,000 compared to the previous quarter.

‘This increase is largely due to an increase in workers aged over 65. The position in other age ranges and on other key indicators we follow remains largely unchanged.

‘We have seen continued growth in the number of pay-rolled employees, but this data excludes self-employed workers so provides an incomplete picture of the labour market.

‘We have a continuing and distinctive challenge, with North East unemployment and working age economic inactivity rates both being the highest in the nine English regions. Yet, employers in some of our key sectors like transport, digital and construction are struggling to find people with the right skills.

‘This is a crucial and urgent conundrum for us to solve. As we face a future of higher living costs, a clear focus on helping people to secure higher paid and skilled employment will be good for our residents, build business confidence and be good for the region’s economy.”