The East Midlands’ unemployment rate is now the second-lowest in the country after dipping below 3% for the first time on record.
It was 2.8% for the period between December 2021 and February 2022 – a full percentage point below the national average and only higher than Northern Ireland (2.5%), according to the Office for National Statistics’ (ONS) regional labour market figures.
However, the region’s 21.7% 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, long-term ill health or studying – was 1.8 percentage points higher than a year earlier and above the 21.4% national average.
Nationally, the ONS said there were as many vacancies (1.3 million) as unemployed people, while it also reported today (13 April) that inflation shot up to 7% in March, the highest point since March 1992.
East Midlands businesses have steered economic recovery but now need support to continue growing
East Midlands Chamber chief executive Scott Knowles said: “At first glance, the unemployment rate falling for the fourth month in succession to hit yet another record low is hugely positive for the region’s labour force. It is largely testament to the success of our businesses in steering a strong rebound for our local economy as they got back to what they do best once Covid-19 restrictions were repealed.
“However, these figures disguise a historic hiring crunch facing many of our companies. The Chamber’s latest Quarterly Economic Survey showed that while 63% of East Midlands businesses attempted to recruit in the first quarter of 2022, four in five (80%) of this cohort encountered problems with filling vacancies.
“Nationally, there are 600,000 more working-age people who have left the workforce than at the beginning of the pandemic. While one suggested remedy may be to coax them back with higher wages and benefits, employers are already hamstrung by an escalating cost of doing business crisis as a result of spiralling inflation, energy prices and staffing costs.
“Two-thirds (67%) of East Midlands businesses expect they will now be forced to raise prices in the next three months. This impacts consumers, employees and their ability to invest in productivity gains, which is particularly crucial for the 37% of our region’s firms that say they are at full operational capacity.
“With the economic recovery now on a knife-edge – as illustrated by growth slowing to 0.1% in February – it’s imperative the Government does more to help people access retraining opportunities for in-demand jobs. Introducing a new skills tax credit would also incentivise employers to invest in training for workers.”