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North East Local Enterprise Partnership reaction to ONS regional labour market statistics

The North East Local Enterprise Partnership’s (North East LEP) Strategy and Policy Director, Richard Baker, has commented on today’s regional labour market statistics, released by the Office for National Statistics (ONS)*.

Richard Baker said: “We’re now starting to see the shape of the labour market in the region as the economy moves out of Covid-related restrictions and support.

“The overall picture in today’s figures is of a labour market which is in recovery, but with a changed structure since early 2020. This recovery is tentative, with other data showing a slow-down in recent growth, the influence of other factors such as skills shortages in a number of sectors, and the need for support for workers to adapt to the changing demands of the labour market. There is some way to go to return to the pre-pandemic position.

“The latest regional employment data release covers the May to July three month period, during which some Covid-19 restrictions were eased. The ONS has also released experimental payroll data which provides more up to date data and also new data that provides the first statistics for local areas for a period entirely after the start of the Covid-19 pandemic (Apr 2020-Mar 2021).

“During May-July, the number of people aged 16 and over in employment in the North East region increased by over 7,000 compared to the previous quarter, although the total is still 18,000 less than in the same period during 2020. The number of unemployed people decreased by 12,000, compared to the previous quarter. The data suggests that some of this decrease was due to people leaving the labour market.

“The experimental pay roll measure shows an increase of 2,500 in the number of payrolled employees in the North East LEP area in August, and the total is now 7,500 higher than in March 2020. This source does not cover all people in employment, excluding, for example, self-employed workers.

“Comparing the newly released employment totals in the North East LEP area for the April 2020-March 2021 period with those a year earlier shows the impact of Covid-19 on self-employed and part-time workers in the area. 

“The overall decrease in employment of 10,000 (1.1%) was driven by a fall of over 17,000 in self-employment. Among the area’s part-time workers, employment decreased by 9,500, compared to a drop of 500 in the number of full-time workers. 

“Overall, the North East continues to have the second highest regional unemployment rate (5.3% of the economically active) among the nine English regions. The region also has the highest proportion of 16 to 64-year olds who are economically inactive (23.9%).

“At the end of July, about 41,000 workers in the North East LEP area were still furloughed, representing about 5.2% of all eligible employees. About 22% of these furloughed workers were in manufacturing, with 16% in food and accommodation services and most of the rest in other service sectors. More than half of furloughed workers in the North East region were on partial furlough, highlighting the gradual return to pre-Covid levels of employment.

“This data shows that there are opportunities to drive forward, but a number of challenges which need ongoing stimulus to the economy and support for individuals and businesses. 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 and to seek investment into the proposals in our Recovery Plan to help accelerate our recovery.”

*The official data released today includes employment information based on surveys in three month period May to July 2021 for the North East region, which includes the North East and Tees Valley LEP areas. It also includes experimental estimates of payrolled employee numbers for August 2021 and LEP area data for the 12 month period April 2020-March 2021. The data has recently been revised to take account of improved population estimates.