Member Article

Growing North East employment "not a blip" says LEP economist

The proportion of people in employment in the North East has reached a record high of 69.0%, the latest ONS statistics have revealed.

Some 15,000 people joined the workforce over the last quarter, bringing the North East employment rate closer to the national rate of 73.1%.

The proportion of inactive people, or those not looking for a job, has steadily declined to levels below where they were 20 years ago.

Meanwhile unemployment rose by 5,000 over the quarter, bringing the North East unemployment rate to 9.8%.

Reductions in the inactivity rate and rise in employment have led North East LEP chief economist Mauricio Armellini to suggest the statistics point towards underlying cultural change in the region.

He said: “The increase in employment is great news for the North East, because employment is what really drives an economy. Our rise was higher than any other region in the country. We’re more than doubling the speed at which the national employment rate is increasing.

“The inactivity figures suggest this is not a blip, but is more structured growth that is here to stay. Inactivity measures the behaviour of people - it shows who is looking for a job or not.

“It’s falling so sharply that it makes me think we are witnessing structural societal change, and people are moving into the labour market. I think its about the breakdown of that cycle of discouragement from looking for work.

“In every quarter I’ve been quite cautious and pessimistic about the statistics, but I’ve been proved wrong and we continue to have excellent performances.”

Graph showing North East inactivity against UK inactivity, compiled by Mauricio Armellini using ONS data

NECC policy and research manager, Mark Stephenson, said: “Currently, we have more people in employment in the North East than we’ve ever had, which is great news.

“Improvement in the North East employment rate has consistently been among the fastest in the UK, while the reduction in the inactivity rate is the highest in the UK – with most of these people moving into employment.

“The unemployment rate has decreased which is welcome, although given the fluctuations in in recent months we will monitor what happens in the coming months before we draw any firm conclusions.

“Redressing the jobless figures in the North East remains one of the key challenges for policy makers. Nevertheless, the continued rise of employment in our region is welcomed, especially taken alongside the reduction in the claimant count.

“National figures continue to improve. It is startling that over 800,000 more people are in work nationally compared to twelve months ago and taken alongside our Quarterly Economic Survey these figures point to a continued, if not guaranteed recovery looking ahead.”

This was posted in Bdaily's Members' News section by Tom Keighley .