The East Midlands’ unemployment rate has hit a fresh new low at 3.1% for the period between November 2021 and January 2022, new figures show.
It falls from 3.4% for the previous three-month reporting period and compares to a UK average of 3.9%.
For the third month running, this is the lowest level since the Office for National Statistics (ONS) began publishing regional labour market figures in April 2015, and is now higher than only three other regions –the South West of England, Wales and Northern Ireland.
East Midlands Chamber chief executive Scott Knowles said: “It’s fantastic news for the region’s labour market that the unemployment rate has plummeted in recent months, hitting a fresh new low for the beginning of this year.
“Amid so much uncertainty in the world at the moment, it sends a clear signal that the East Midlands is open for business and recovering strongly from the direct impacts of the pandemic.
“The improving picture reflects our own research, which indicates our region’s firms are creating jobs to meet strong demand following the removal of restrictions.
“The Chamber’s latest Quarterly Economic Survey (QES) for Q1 2022 showed a net 20% of businesses increased their workforce in the previous three months, while a net 36% anticipate expected it to increase over the coming quarter.
“We are represented by a very diverse economy in the East Midlands – ranging from logistics and services to hospitality and tourism – while our manufacturing industry continues to play a hugely important role, with our region having the highest proportion of production sector jobs at 12.2%.”
Tightening labour pool presents acute challenge for businesses
While unemployment fell below pre-pandemic levels for the first time at a national level, the ONS said the number of people out of work and not looking for a job rose again, meaning total employment remained well below its pre-Covid level.
In the East Midlands, the economic inactivity rate – which measures the proportion of 16 to 64-year-olds who have exited the labour market for reasons such as retirement, caring duties or studying – was above the 21.3% national average at 21.6%.
Scott added: “With more people leaving the labour market and fewer overseas workers to choose from since the end of the UK-EU transition period just over a year ago, we are beginning to see emerging skills gaps across numerous industries.
“With the cost of business continuing to rise amid surging inflation and price rises in aspects such as energy, supplies and people, the impact this will have on business growth – which ultimately fuels local job creation and wealth – remains a considerable worry.
“Two-thirds of East Midlands businesses told us they have seen price rises and cashflow is now down for the first time in over a year. All this highlights the importance of investing heavily in skills, something that was highlighted in the Government’s Levelling Up White Paper as one of its 12 ‘missions’ but must now be prioritised with rapid action to ensure our post-Covid and post-Brexit economic recovery doesn’t stall.
“With the Spring Statement also coming up next week, this is a timely reminder that the Chancellor must not impose any new costs or taxes on businesses, and should also delay the introduction of the planned National Insurance rise.”