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East Midlands Chamber News

New ONS employment figures are concerning - but don't paint full picture, says East Midlands Chamber

New figures published today by the Office for National Statistics (ONS) showed the largest fall in UK employment in more than a decade.

The number of people in jobs between April and June fell by 220,000 when compared with the previous quarter, representing the largest quarterly decrease since the last global financial crisis in May to June 2009, when 254,000 jobs were lost.

Analysis by the ONS also found the number of people on UK payrolls in July 2020 fell by 730,000 compared with March 2020. The UK unemployment rate of 3.9 per cent, however, is largely unchanged on the previous year and quarter as 7.5 million people were furloughed in June.

In the East Midlands, the unemployment rate for April to June was 4.3 per cent, a 0.6 per cent increase on the previous quarter – the highest rise in the country – while the employment rate was down 0.9 per cent to 77.3 per cent.

ONS employment figures 'lag behind reality on the ground'

Responding to the figures, David Pearson, Director of Partnerships at East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire), said: “While these figures clearly paint a concerning picture for the country’s economic health, we still don’t quite know what the full image will eventually look like after we come through the other side of this pandemic.

“That’s because the headline data continues to lag behind the reality on the ground as the Job Retention Scheme begins winding down. Once it is closed entirely at the end of October, this could be the spark of a mass wave of job cuts across the country.

“In the East Midlands, there were 700,000 people on the furlough scheme at the end of May and, in our latest Quarterly Economic Survey, we found that 34% of businesses in the region planned to reduce their headcount in the three months following June, compared to 29% nationally.

“This is very worrying and the higher proportion of potential job losses our region could bear may well reflect the high number of people in some lower-value roles in our manufacturing, retail, tourism and hospitality industries – all of which are more at risk as a result of Covid-19.

“However, we also know that we have sectors here that are performing strongly, including logistics, food manufacturing, IT and technology, with opportunities for businesses in these sectors to create new jobs to offset some of the losses.

“To protect as many jobs as possible, Government should look again at how it phases out the Job Retention Scheme, supporting more businesses to get through the uncertainty, while keeping people on their books.

“For the longer term, we need to think about how our region will continue to create jobs. The shape of the economy coming out of the pandemic is going to look very different to how it looked before, and those sectors that can grow will also need backing.

“For those who do unfortunately find themselves out of employment, we need to ensure they are given the support they need in the form of skills training to prepare them for jobs of the future.

“It will also be crucial to consider how these people physically access the locations where the new jobs are created, which underlines the importance of Government investment in transport and infrastructure.

“The latest ONS unemployment statistics just serve to underline further that we are in very messy and uncertain times economically. The more certainty and clarity that can be provided by the Government in its messages and policies, the quicker we will be able to move things in the right direction.”

The ONS regional statistics can be found here.