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East Midlands Chamber News

East Midlands unemployment rate lowest since start of pandemic – but Chamber issues inflation and skills warning

Unemployment in the East Midlands has dropped to its lowest level since the beginning of the pandemic, new figures show.

The region’s unemployment rate fell to 4.1% for the period between July and September 2021, according to the Office for National Statistics.

This marked a 0.2% reduction compared to the previous reported period between June and August, while it was also 0.2% below the UK average.

It is the lowest unemployment rate for the East Midlands since the three months to May 2020, when it was 4% - having peaked at 5.9% earlier this year.

East Midlands Chamber chief executive Scott Knowles said: “It’s promising to see the jobs market growing again after the struggles of the past year and suggests the economy is moving in the right direction.

“The latest figures reflect how industries that are heavily represented in our region’s economy – including hospitality, retail, and leisure and tourism – are recovering well after the lifting of Covid-19 restrictions.

“At the same time, we’ve also seen initiatives like the Kickstart Scheme – in which the Chamber has played a key role as a gateway organisation to facilitate almost 1,500 job placements – contribute to helping young people, who had been disproportionately affected by Covid, find work.

“We expect the region’s jobs market to continue improving, with the latest data from the Chamber’s Quarterly Economic Survey (QES) for Q3 2021 showing a net 25%* of East Midlands businesses saying they have increased headcount over the previous three months and a net 38% expecting a rise in employment over the coming three months.”

Skills gaps and inflation cause concerns for economic recovery

National figures show that job vacancies hit another record high in October at 1.17 million – almost 400,000 higher than pre-Covid – as employers continued to struggle with skills shortages.

This is despite the end of the furlough scheme, which was still supporting an estimated 1.1 million people just before it ended on 30 September.

Scott added: “The record number of vacancies highlights the acute hiring crisis faced by many businesses right now. While two-thirds (67%) of companies attempted recruitment in the previous quarter, according to our QES, 71% of this cohort said they faced problems with hiring the right people.

“While some predicted the end of furlough would release more of the workforce back into the labour market to plug these issues, the continued rise in job openings suggests the problems go much deeper.

“We have skills gaps across the board that urgently need to be addressed – something that was highlighted most pertinently by the HGV driver shortage during the recent fuel supply crisis.

“Many of these are longstanding but as Brexit and Covid have driven a more deep-seated decline in labour supply, they have come to the fore more prominently.

“The concern here is that an inability to address the skills gap and bolster productivity will dampen the economic recovery.

“This could become particularly problematic if inflation, which surged by 4.2% in the year to October, continues to rise as it hits the bottom line of businesses – and therefore put a squeeze on the gains we’ve made in employment.”

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