East Midlands economy shows resilience as regional unemployment remains under 4%
The East Midlands’ unemployment rate has remained at 3.7% for the fourth month running, new figures by the Office for National Statistics (ONS) show.
The data, for the period between July and September 2023, means the proportion of working-age people in the region who do not currently have a job but are actively looking for work has been below 4% since the three months to October 2021 – almost two years.
Nationally, the unemployment rate is half a percentage point higher at 4.2%, although the economic inactivity rate for 16 to 64-year-olds – which measures the number of working-age people who have dropped out of the labour market for reasons such as retirement, caring duties, long-term ill health or studying – is 21% for both the UK and East Midlands. This remains above a pre-pandemic trend around the 19% mark.
East Midlands Chamber chief executive Scott Knowles said: “The fact our region’s unemployment rate has remained at a relatively low level for such a prolonged period is testament to the efforts and resilience of our region’s business community in the face of significant economic challenges.
“Rising economic inactivity has been one of the greatest concerns over the past couple of years as it led to a dwindling labour market, which has restricted capacity – and therefore the ability to grow, raise productivity and bring prices down.
“While this rate remains above pre-Covid levels, it’s pleasing to see this has now come down by about 2% throughout this year, giving firms more room to manoeuvre.
“However, our own research shows there is no room for complacency. Our Quarterly Economic Survey has highlighted a slight growth in the region’s workforce, with 60% of East Midlands businesses adding to headcount in the first quarter of 2023, rising to 62% in Q2 and 63% in Q3.
“Employment prospects look weaker going forward with the proportion of firms expecting to recruit in the coming months falling by a net 8%, amid slowing demand for our region’s businesses products and services from both domestic and international customers.
“Many employers continue to face challenges with filling job vacancies. While 58% of organisations attempted to recruit during Q3, two-thirds (67%) of those experienced problems in finding suitable staff.
“This illustrates how we really need a dedicated Government policy that supports companies to invest in their people, whether that be in upskilling their existing workforce or reskilling prospective employees to fill skills gaps.
“In our regional economic blueprint, A Centre of Trading Excellence: A Business Manifesto for Growth in the East Midlands and Beyond, investment is one of the ‘four Is’ we urge Government to prioritise – and next week’s Autumn Statement provides a great opportunity to address this.
“We have set out a list of policies we believe will make the required difference, including introducing flexible incentives for businesses that invest in staff training and bringing forward the introduction of the Lifelong Loan Entitlement to support retraining and the retainment of an older workforce.
“We must also tailor policies to recognise the diversity of people who are out of work and avoid a one-size-fits-all solution. We would also like to see Government work with businesses to offer support, and share best practice, on what a flexible and inclusive workplace looks like as this is another vital ingredient in enticing people back to work.”
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