13 Sep 2022

‘Monumental skills shortage’ could now be deterring businesses from creating jobs, says East Midlands Chamber

The East Midlands’ unemployment rate has risen for the first time in 10 months – but remains far below the national average.

After hitting a record low of 2.4% for the period between April and June this year, the Office for National Statistics’ (ONS) regional figures for May to July show it rose to 2.8%. The UK unemployment rate during this time was 3.6%.

The region’s economic inactivity rate – 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 – remains at 21.9%. This is among its highest level for the past year and three percentage points above where it was pre-Covid (18.7% in January to March 2020).

East Midlands Chamber chief executive Scott Knowles said: “Our region’s firms continue to create plenty of jobs, but we’ve been saying for the past year how this could tip at any moment given the monumental skills shortage that is putting a lid on capacity for four in 10 East Midlands businesses.

“In our most recent Quarterly Economic Survey, two-thirds of our region’s companies attempted to recruit between April and June but 82% of them struggled to fill roles.

“This is clearly unsustainable and while our region’s unemployment rate remains at a near-record low, the fact the economic inactivity rate shows no sign of dropping suggests some firms are dropping plans to grow amid the dwindling labour pool and huge uncertainty in the economic landscape, which is driven by an escalating cost of doing business crisis.

“While new Prime Minister Liz Truss’ energy plan was welcomed, we need to see more details on what this means for businesses to provide long-term certainty. At the same time, her Government must not forget the other pressures facing firms and work in collaboration with the business community to seek long-term solutions to the various challenges we face.

“This includes reviewing and reforming the shortage occupations list to include more jobs at all skill levels, backing businesses to invest in training current and new staff, and removing barriers to international trade.”