The North East Local Enterprise Partnership’s Strategy and Policy Director, Richard Baker, has commented on today’s regional labour market statistics, released by the Office for National Statistics (ONS)*.
“As we move out of COVID-19 controls into a policy agenda focused on levelling up the national economy, today’s data supports the need for government to focus this agenda on a group of issues in the northern labour market.
“Today’s figures show furlough has been successful in containing the rise of unemployment amongst employees throughout the pandemic. Early commentators suggested the impact of COVID-19 could see North East regional unemployment exceed 10% but today it is around just half that at 5.1%.
“They also show a bounce back in employee numbers in the region. Between February and November 2020, payrolled employee numbers in the North East LEP area fell by almost 20,000 or 2.5%. However, between November 2020 and October 2021, numbers increased by almost 32,000, resulting in a figure 1.5% higher than it was pre-pandemic – which is good news. But there are also significant challenges.
“The region’s economic ambitions set out in our Strategic Economic Plan are that the North East has more people working, with fewer unemployed people (not in work but looking for work) and fewer being economically inactive (having left the labour market) compared with the rest of the country.
“Today, we can see that whilst we’ve had the largest decrease in the unemployment rate over the last year, this has not been accompanied by an increased employment rate. Instead, the economic inactivity rate has increased by more than in any other English region, with an additional 32,000 working age people being inactive compared to the same period of 2020. Recent increases in inactivity have been particularly large among older workers.
“There is more work to do to understand the detail behind these changes. However, we can see that the North East region has about 4,200 fewer employees in manufacturing than pre-Covid, with decreases in some service sectors too. Meanwhile there have been large increases in the number of employees in sectors such as health, science and education as our economy changes.
“Experimental data produced this month seems to confirm the trend we saw last month that we are seeing large numbers of older workers leaving the labour force, as well as continuing challenges for the very youngest.
“Both the North West and Yorkshire and the Humber have also experienced falling employment and rising inactivity, but this is not true elsewhere in England, highlighting the need for distinct employment policies for the North.