The North East’s jobs position relative to the rest of the UK continued to improve in the latest three-month period after the region saw its unemployment rate fall last month below the national average for the first time since current record began in 1993.
Today’s figures from the Office for National Statistics (ONS) were greeted with cautious optimism by North East business leaders.
The unemployment rate in the region in the March-May quarter was 3.5%, a fall of 0.7% since the three months from December 2022 to February 2023, compared with a rise of 0.2% to 4% in the UK as a whole.
The North East reduction was the biggest drop in unemployment in the UK over the three months and the largest decrease (1.6%) compared with the same period last year, said the ONS.
The 46,000 unemployed people in the North East is 18,000 fewer than a year ago and compares with 73,000 in December 2019-February 2020, just before the pandemic. Regional unemployment peaked at 162,000 (13.6%) in 1993.
Just as significantly, the North East employment rate rose in March-May by 1.4%, the second best performance in the UK after the West Midlands with 1.9% and above the UK average of 0.2%.
Compared with the same period last year the North East rate was up by 3%, the biggest increase in the country.
The employment gap is closing but there is still some catching up to do. The North East employment rate is 74.5% compared with the UK average of 76% and joint lowest with London.
It is a similar picture for economic inactivity – those neither in work nor seeking work – with the regional figure down by 0.8%, but some way still to go. to catch up
The region’s inactivity rate stands at 22.8% and remains the highest apart from Northern Ireland and Wales and above the UK average of 20.8%. But the regional reduction was twice the UK average of 0.4% over the three months, and compared with the same period last year was down by 2%, the best performance in the UK.
North East Chamber
Courtney Hiles of the North East Chamber of Commerce said:
“The ONS employment figures released today show that, whilst employment growth has slowed in comparison to previous months, it remains on an upward trajectory. With that being said, gaps remain between the rest of the UK and the North East, and despite recent improvements we still have the highest rates of economic inactivity in England…
“The ONS reports that nationally, significant sources of inactive people coming back into work are those who have been looking after their family or household, and people coming out of retirement. This potentially suggests that increased financial pressures are influencing a wider variety of households.
“The Chamber has been clear over the past year: the cost of living and the cost of doing business are deeply intertwined, and we’re committed to representing our members with that in mind. Already this month, our chief executive John McCabe has met with Chancellor [Jeremy] Hunt. John called for affordable transport, a strong future skills pipeline, and support for public services; all of which directly impact people’s abilities to find secure, good work.
“On that same day, we also hosted representatives from the Bank of England here in the North East, to discuss the cost of living, and the recruitment challenges our members face.
“Whilst today’s figures are a cause for cautious optimism, it’s clear there’s still work to be done, and that the labour market in the North East remains difficult to navigate. What’s crucial is to make sure that those who are re-entering the workforce are supported to stay in work.”