Unemployment in the North East has fallen for the third month in a row, though it remains the highest in the UK.
New figures from the Office for National Statistics (ONS) show that the regional unemployment rate up to the end of February stood at 5.4%. That was a fall of 0.1% from last month, though significantly above the national average of 3.8%.
The number of people claiming unemployment benefit in the North East also fell to stand at 80,445. That figure is now only around 5,000 higher than pre-pandemic levels.
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But business groups have warned that challenges lay ahead for the North East economy and said the recovery from the pandemic was "stuttering".
Arlen Pettitt, knowledge development manager at the North East England Chamber of Commerce said: “These jobs numbers tell their own story, especially when put alongside yesterday’s GDP figure showing just 0.1% growth in February. The headline rate of unemployment may have fallen, however this isn’t the result of more people in work but rather more people drifting out of the labour market entirely, as seen in the rising economic inactivity figure.
“What we have is an economic recovery which is stuttering. Just as the cost of living is starting to bite for individuals, so too is the cost of doing business for our region’s employers. Our latest economic survey told us costs are the biggest worry for businesses, with nine in ten North East firms citing inflation as a concern and the same number saying energy prices.
“The Chancellor’s Spring Statement failed to address those concerns. It’s been two almost impossibly difficult years, and with more uncertainty ahead of us we need the Government to face up to reality and take some tangible steps to support business recovery.”
North East LEP chief executive Helen Golightly said: “Looking at local data for the last year, employment in the North East LEP area decreased more for women than men, and we have seen increases in economic inactivity across all working age groups in the North East. There has been a large growth in numbers citing looking after family or home as a reason for inactivity.
“However, there is an opportunity to do more to benefit the economy and boost employment, with employers continuing to report demand in the labour market and difficulties in recruitment.
“Energy prices, along with a range of other price rises, are going to increase costs for families and we urge government to focus invest into the North East to encourage more progress in the labour market.”
Nationally, the number of UK workers on payrolls rose by 35,000 between February and March to 29.6m, the ONS said.
The figures also showed that UK workers suffered the biggest fall in their real pay for nearly nine years as the cost-of-living squeeze tightened. Regular pay excluding bonuses tumbled 1.8% in the three months to February when taking inflation into account, the steepest fall since August to October 2013.
