Fewer people working in North East and more fall out of the jobs market completely

The Office for National Statistics employment figures released today show the North East employment rate in the last quarter of 2022 was 71%, down 0.5% on the previous three months and 4.6% lower than the national average, while unemployment in the region was 4.5%, up by 0.2% and 0.8% higher than the the UK as a whole.

And the number of people in the region classed as economically inactive – not working or looking for work – was 25.7%, a rise of 0.5% and 4.3% more than average.

‘Devastating blow’ for Levelling Up

North East England Chamber of Commerce policy adviser Callum George said the latest news on economic inactivity was particularly serious, as a national fall in the number of vacancies would make it harder to re-enter the workforce.

“Our Quarterly Economic Survey shows staff costs are North East businesses’ third highest concern,” he said.

"When you couple this with the fact that employment has fallen, it could suggest vacancies aren’t being filled, and businesses are looking to manage outgoings.

“One of Prime Minister Sunak’s five pledges for 2023 is to grow the economy and create more high-wage jobs. If regional inequalities are not addressed as part of this, it would be a devastating blow for Levelling Up in the North East.

North East Local Enterprise Partnership chief executive Helen Golightly OBE said the continuing fall in the working population was worrying.

“The data shows there was rapid slowing in the labour market in the North East in the three months before Christmas, after previous progress across the year,” she said.

"A distinctive feature of this data is the relative decline in the position of men, with many leaving the labour force over the year, whilst women’s employment increased.

“We remained at the bottom of the table for overall employment and unemployment rates. Although the formal unemployment rate fell, our ongoing concern about people leaving the labour force altogether was reinforced as we saw the third highest increase in the working age inactivity rate over the year amongst the nine English regions.

More over 65s working

“This is likely an indication of the ongoing pressures in the economy given the impact of higher costs of living, and follows on from the data we reported in the previous month’s figures showing a drop off in demand for goods and services amongst consumers, and for labour amongst smaller businesses.

“Compared with the same period in 2021, total North East employment increased by 9,400 and unemployment was 14,600 lower. However, working age economic inactivity in the region was about 16,600 higher. Much of the increase in employment was amongst people aged over 65.

“Other experimental regional labour market estimates suggest the largest increases in employment have been among women aged 25 to 34 and 50 to 64, whilst the largest decreases have been among males aged 25 to 34 and 35 to 49.

"Meanwhile, the largest increases in inactivity have been among men aged 35 to 49 and 50 to 64, and among women aged 16 to 24, while there has been a large increase in unemployment among males aged 25 to 34."