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North East economy struggling to recover from covid 'due to crippling skills shortage', says expert

The North East’s economic recovery from the covid epidemic is being hampered by a ‘crippling’ skills shortage, says a leading recruitment expert.

By Kevin Clark
Tuesday, 15th March 2022, 1:28 pm

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Steve Shaw, of North East England Chamber of Commerce member and motor industry recruitment specialists Ingenia, said the shortage was costing tens of thousands of pounds per business – and firms were struggling with the difficulties of bringing in talented staff from abroad.

"Local skills shortages are compounded by how difficult it is in the current migration system for dealers to bring in specialists like technicians, panel beaters and mechanics from overseas,” he said.

"We need to improve the local skills pipelines into these key regional sectors and adjust the migration system to keep up with the immediate shortages that are holding businesses back."

The latest North East employment figures have been released

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Figures from the Institute of the Motor Industry show there were 23,000 vacancies listed in the industry last month, the highest in 20 years.

“Our own findings show vacancies up 117% from 2020 - 2021 and Year to Date vacancies are up by 150%."

New figures today from the National Office of Statistics for the period from November 2021 to January 2022 show there are 1,189,000 people in work in the region, a rise of 7,000 (0.6%) over the quarter but a fall of 13,000 (1.1%) over the year.

The North East employment rate stands at 70.9% - compared to a rate of 75.6% across the entire UK.

North East England Chamber of Commerce knowledge development manager Arlen Pettitt

There were 69,000 people classed as unemployed in the region, an increase of 2,700 (4.1%) over the quarter but a fall of 10,000 (12.8%) over the year.

The North East unemployment rate was 5.5%, compared to a national rate of 3.9%.

The provisional number of people claiming unemployment benefits in the region stands at 81,900, a fall of 1,800 (2.2%) over the month and down by 37,500 over the year (31.4%). The claimant count rate for the North East in February was 5.7%.

North East England Chamber of Commerce knowledge development manager Arlen Pettitt said Chancellor Rishi Sunak had to address the challenges facing the North East economy in the upcoming Spring Statement, especially skills shortages in the region’s key industries.

Steve Shaw

“Today’s figures paint the picture of a regional economy trying its best to grow in really difficult circumstances,” he said.

"There are some encouraging signs, including an increase in the number of people in employment and a fall in economic inactivity, but our unemployment rate remains stubbornly and significantly higher than the national average.

“Our members are telling us of staff shortages in key industries, especially for roles requiring specialist skills like developers and motor industry technicians.

"These shortages limit growth and push up costs – just as individuals are struggling with the cost of living, so are businesses struggling with the cost of doing business as inflation hits energy prices and raw materials.

“With the Chancellor’s Spring Statement a little over a week away, we need to see immediate action from him to ease these pressures, alongside efforts across Government to turn levelling up into a reality.”

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