The East Midlands’ unemployment rate continues to drop – once again hitting its lowest point on record, new figures show.
It was 3.4% for the period between October and December last year, compared to a 4.1% national average.
This is the lowest level since the Office for National Statistics (ONS) began publishing regional labour market figures in April 2015, and is higher than only four other regions – East of England, South West, Wales and Northern Ireland.
East Midlands Chamber chief executive Scott Knowles said: “After falling to 3.5% in the previous reporting period, it’s fantastic news for the region’s labour market that the unemployment rate has fallen to a new record low, which sends a clear signal that the East Midlands is open for business.
“It reflects our own research that indicates our region’s firms are creating jobs to meet strong demand following the effects of the pandemic. The Chamber’s latest Quarterly Economic Survey (QES) for Q4 2021, covering the same period as the ONS figures, showed two-thirds of companies attempted to recruit, while a net 35% expected to increase their headcount in the first three months of 2022.
“We are represented by a very diverse economy in the East Midlands but there have been some standout sectors to celebrate in recent times, such as a logistics industry that has been a major driver of job creation during the pandemic, which has accelerated pre-existing online shopping trends.”
However, the East Midlands 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 or studying – was above the 21.2% national average at 21.9%. It recorded the largest increase compared with the previous year at 1.7 percentage points.
Another key finding in the ONS data was that UK wage growth continues to lag behind the rising cost of living – representing a 0.8% fall when taking inflation into account.
The ONS said early estimates suggest employers are beginning to push up wages further and faster – with median monthly wages in January increasing by 6.3% compared with the same month last year, and 10.3% higher than before the pandemic in February 2020.
Scott added: “Despite the positive trajectory in unemployment, businesses are still encountering major recruitment challenges in a super competitive jobs market, as evidenced by yet another record of 1.3 million job vacancies nationally between November and January.
“The significant rise in the proportion of people exiting the labour market in the East Midlands means there are fewer people to choose from – a worrying trend at a time when companies are desperately trying to fill roles to cope with demand, which will enable them to continue growing and creating more opportunities for local people.
“Many companies in traditional industries such as manufacturing and construction often tell us about the difficulties in replacing an ageing workforce with younger talent, and the latest QES showed that eight in 10 of those that attempted recruitment struggled to find people with the right skills.
“All this highlights the importance of investing heavily in skills, something that was highlighted in the Government’s Levelling Up White Paper as one of its 12 ‘missions’ but must now be prioritised with rapid action to ensure our post-Covid and post-Brexit economic recovery doesn’t stall.”