North East LEP Chief Economist Chris Milne examines the latest Labour Market Statistics and concludes that while there are still challenges to overcome, the figures provide more evidence that the regional economy is continuing to grow in the longer term.
An important part of my role is understanding and analysing the evidence that supports the North East LEP’s strategic plan and shapes our approach to economic growth.
One of the best measures is the labour market statistics produced by the Office for National Statistics.
The latest figures provide us with some interesting, but mixed messages about the North East economy.
- Employment of people aged 16+ has risen by 17,000 to near record levels to stand at almost 1.2m
- There are now 32,000 fewer people out of work aged between 16-64 – that’s a 25% fall compared to the same period a year ago
- Unemployment in the North East has fallen rapidly. The number of people out of work over the past year has dropped from 9.9% to 7.6%. That fall over the past year is almost twice the average for England
- The traditional working age population of the North East has continued to rise, with 5,000 more people aged 16-64
- Our employment rate has stayed at near record levels at 69.3%, but has fallen below its highest ever recorded level of 70.2% in the previous quarter
- We have seen a continuation in the falling number of people claiming Job Seekers Allowance or Universal Credit in the region over the past year, down by nearly 18% to stand at 46,700. The claimant count is now at its lowest level since January 2008.
New figures published today by UKTI also demonstrate where some of the growth is coming from.
In 2014/15 UKTI recorded 44 successful foreign direct investment projects in the North East LEP area, generating around 3,200 jobs – treble that of the previous year.
With UKTI, we supported 42 of these projects, bringing significant benefits to our region.
But the North East economy still has its challenges.
Our rising population puts extra pressure on our economy to maintain and improve upon our high employment rate relative to previous years.
The wider 16+ population has risen by 16,000 in the past year, faster than the 16-64 age band.
Whilst the unemployment rate is decreasing and we are beginning to close the gap with the national average, it is still high in comparison with its current jobless level at 7.6% against the English national average of 5.6%.
Another challenge is the inactivity rate (a measure of the percentage of the population not looking for work) which has increased by 2.1 percentage points in the year to April 2015.
Inactivity remains one of my key concerns for the region but our economic activity rate of 75.1% is still high when compared to historical data for the North East region. Encouragingly, today’s official statistics show there is now a greater percentage of people who are inactive but want a job.
Short term fluctuations in statistics are to be expected and it’s our longer term trajectory and progress towards the targets we set out in our Strategic Economic Plan that are important.
This is an area I will be keeping a close eye on as we deliver our plan for economic growth, and move into a new Parliament complete with all the new challenges and opportunities that presents for our region.