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East Midlands Chamber News

ONS labour market statistics show positive trajectory, says East Midlands Chamber – but it warns Government against complacency

More people in the East Midlands are now in jobs than at the tail end of last year – but the unemployment rate remains above the national average, according to the latest Government figures.

Between December 2020 and February 2021, the region’s unemployment rate was 5.1%, down from 5.6% in the three months to November 2020, the Office for National Statistics’ (ONS) labour market statistics show.

Only three regions had a higher unemployment rate during the most recent reported period, with the UK average at 4.9%.

East Midlands Chamber survey shows recruitment intentions are up among businesses

But East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) points out the figures are heading in the right direction.

Chief executive Scott Knowles said: “While the East Midlands has clearly been disproportionately affected during the pandemic in terms of unemployment – largely due to the fact our economy is well represented by many of the industries that have been shut down, including hospitality, tourism and retail – these latest labour market statistics should give us confidence about what the future holds.

“The falling unemployment rate may be a result of the successful vaccine rollout programme giving businesses the assurance they need to begin employing people again.

“Our latest Quarterly Economic Survey for Q1 2021, which received a record 539 responses from East Midlands businesses between 15 February and 8 March, showed that while a net 2%* of firms decreased headcount over the previous three months, a net 26% expected to increase their workforce over the next three months.

“With the Government presenting its roadmap out of lockdown in late February and the vaccine rollout continuing strongly, we can expect to see recruitment intentions speed up over the coming months – with the unemployment rate falling further as a result.

“The Office for Budget Responsibility has already revised downwards its forecast for peak UK unemployment, which it says could reach 6.5% by the end of this year – down from an original estimate of 7.5%.

“While the trajectory is positive, the projection is 1.6% above the current national rate, which means we should be prepared for more hardship around the corner as lockdown eases and the Job Retention Scheme unwinds.

“Further action will therefore be needed to support the labour market post-furlough, including supporting businesses to recruit and retain staff through a temporary cut in employer national insurance contributions.

Kickstart scheme is now helping to find jobs for young people

“ONS figures for the year to March also show that under-25s accounted for more than half (436,000) the 811,000 payroll jobs that were lost in the UK in the year to March, highlighting how the pandemic has hit young people harder than anyone from a jobs perspective.

“However, we’re now beginning to see the fruits of the Kickstart scheme, which incentivises employers to offer 16 to 24-year-olds a six-month work placement. The Chamber, acting as a gateway organisation for employers to apply for Government grants, has facilitated more than 1,150 approved vacancies with over 300 starts already.

“As this scheme gathers pace, it will be a great avenue for young people to join the labour market – and we’ll be encouraging businesses to look for long-term opportunities, such as apprenticeships, to ensure this acts as a solid pathway to permanent employment.”

For the regional breakdown of the ONS labour market statistics, click here.

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