Unemployment in the North East has hit a record low, new figures show.
The region’s unemployment has fallen sharply in the three months to the end of January to reach a level of 4.1%, the lowest on record. The number of people in the North East classed as ‘economically inactive’ also fell to 24.9%, though that remains the highest in the UK.
The North East has seen the highest drop in unemployment in the UK over the last year at 1.3% and no longer has the highest rate of joblessness in the country, though it is still above the national average of 3.7%. The number of people claiming unemployment-related benefits stood at 68,775.
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Callum George, policy adviser at the North East England Chamber of Commerce, said: "Compared to the previous quarter, in the North East, the employment rate has improved by 0.6%. Economic inactivity has also improved by 0.3%, as has the unemployment rate, by 0.6%.
"When you consider the significant investments in the region that will create more jobs, in the long term we hope that they can drive a real shift in momentum for employment in the North East. Already this year we’ve had the positive news of FulwellCain Studio’s plans to create 8,000 jobs in filmmaking, amongst other critical private sector investments.
"What’s now important is that we can match the right skills to vacancies in the area, to ensure that employment is fulfilling and long term. Looking ahead to Chancellor Hunt’s Spring Budget tomorrow, it will be crucial that people are not just encouraged back into work, but are also supported adequately in doing so.
"This means addressing challenges such as childcare, health inequalities and training; which we called for in our budget submission at the start of the year. With everything going on in our region - be it devolution or private investment - there’s a clear appetite for ambition in the North East. It’s critical that our regional ambitions are matched by policies designed to support people back into work."
Helen Golightly, chief executive of the North East LEP, said: “The data released today shows encouraging signs of progress in the region’s labour market over the past 12 months. The latest regional employment total is over 25,000 higher than a year ago and the employment rate has increased by more than the England equivalent. In addition, the unemployment rate has fallen by more than in any other region.
“However, there is work to be done to close the gap further as the North East still has the lowest regional employment rate and the highest working age economic inactivity rate, where people are neither employed nor seeking work. It is a concern that the number of economically inactive people has only fallen slightly in the last year despite the increased employment total.
“Additionally, we need to ensure that employment increases across the entire North East workforce. Experimental ONS data suggests that the rise in employment in the last year in the North East has been concentrated among older females and younger males.”
Nationally, Britain’s unemployment rate has remained unchanged, but there are further signs of cracks in the jobs market after official figures showed a fall in vacancies and an increase in redundancies.
The Office for National Statistics (ONS) said the rate of unemployment stood at 3.7% in the three months to January, unchanged from the previous three months. The data revealed a 51,000 drop in the number of job vacancies to 1.2 million, while the redundancy rate edged higher.
Pay also remained under pressure despite declining inflation and a 6.5% increase in regular wages, excluding bonuses, though this was slower than the 6.7% rise in the previous three months. With Consumer Prices Index (CPI) inflation taken into account, real regular pay fell by 3.5%.
Darren Morgan, director of economic statistics at the Office for National Statistics, said: “Recent trends have continued, with a slight rise in employment, especially among part-timers. Detailed figures from our business surveys also show record numbers of jobs in several sectors, including law and accountancy firms, health, and pubs and restaurants.
“In addition, the number of people neither working nor looking for a job fell overall, driven by a drop in young people. However, a record number of people were completely outside the labour market due to long-term sickness. Although the inflation rate has come down a little, it’s still outstripping earnings growth, meaning real pay continues to fall.”
Ahead of tomorrow’s Budget, Chancellor Jeremy Hunt said: “The jobs market remains strong, but inflation remains too high. To help people’s wages go further, we need to stick to our plan to halve inflation this year.
“Tomorrow at the Budget, I will set out how we will go further to bear down on inflation, reduce debt and grow the economy, including by helping more people back into work.”
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