east midlands news

East Midlands unemployment rate hits lowest point in seven years – but Chamber warns of recruitment challenges

The East Midlands’ unemployment rate has fallen to its lowest point on record, new figures show.

It was 3.5% for the period between September and November 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 represented the smallest proportion of the workforce being unemployed since the three months to December 2019, when the rate was 3.6%.

It also marked a significant drop on the previous reporting period for August to October 2021, when the region’s unemployment rate was on par with the UK average at 4.2%.

East Midlands Chamber chief executive Scott Knowles said: “This is fantastic news for the region’s labour market and 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 showed two-thirds of companies attempted to recruit, while a net 35% expect 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 the logistics industry that has been a major driver of job creation during the pandemic, which has accelerated pre-existing online shopping trends.”

Tightening labour pool presents acute challenge for businesses

While the East Midlands has one of the lowest unemployment rates for over-16s in the UK, the economic inactivity rate for people aged 16 to 64 rose from 21.02% to 22% in the most recent reporting period.

UK job vacancies also soared to a record high of 1.24 million between October and December – 462,000 higher compared with the three months before the pandemic.

Scott added: “Despite the positive trajectory in unemployment, businesses are still encountering major recruitment challenges in a super competitive jobs market.

“The 0.8% increase in the economic inactivity rate represents a rise in the number of people who have opted out of employment, whether it’s for studying, caring or to take early retirement – with the latter being a noticeable trend during the pandemic.

“This means the labour pool is tightening 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 jobs 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.

“As we await publication of the Government’s delayed Levelling Up White Paper, the wider context behind the latest ONS data illustrates the need for policymakers to understand how we can pull the right levers in order to support the local economy’s requirements.”

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East Midlands Chamber responds to national lockdown announcement

East Midlands Chamber is welcoming One-off £9,000 business grants, but says firms need the inside track to the Government’s plan for coming out of the newly-announced national lockdown.

Responding to the Government’s announcement of a third national lockdown for England, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) chief executive Scott Knowles said: “After a desperate 2020 for businesses and communities, a third national lockdown is another devastating blow to business confidence as it follows hard on the heels of lost trade during the festive season – not to mention the uncertainty that prevailed up until the eleventh hour of the Brexit transition period.

“The Government’s need to act in the face of spiralling threat to public health is obviously understood but after already spending billions on helping good firms to survive this crisis and save jobs, it must not let these companies fail now when the vaccine rollout provides light at the end of this long, dark tunnel.

“The Chancellor’s announcement today of a one-off £9,000 grant for retail, hospitality and leisure businesses will hopefully help keep their heads above water for a couple more months, but Westminster must remember financial support – while certainly welcomed and required – is no substitute for a fully open economy that allows businesses to generate their own revenue.

“It’s now time for the Government to open the lines of communication with businesses by sharing its plan for how the brakes will be lifted on the economy over the coming months to allow businesses to plan properly.”

For more information on guidance and business support available during the current lockdown, visit our Covid-19 support page here.

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Chamber chief executive writes to Prime Minister demanding greater clarity for businesses in lockdown decisions

The chief executive of East Midlands Chamber has written to Boris Johnson urging the Government to provide greater clarity to businesses over lockdown restrictions.

Scott Knowles told the Prime Minister yesterday (1 December) about the “dissatisfaction” felt by the private sector in the region regarding plans to place Derbyshire, Leicestershire and Nottinghamshire into Tier 3 measures.

He said the East Midlands has been impacted by restrictions longer than anywhere else in the country, with Leicester and parts of Leicestershire the first area to be placed under local lockdown at the end of June, and reminded Mr Johnson of the five tests requested by the chamber of commerce – which represents 4,250 members across the three counties – by which to assess decisions taken.

Commenting on the new tiered approach to restrictions in the letter, Scott said: “I understand the difficult discussions involved in this and the numerous factors that have to be taken into consideration.

“However, I wanted to express our dissatisfaction at the outcome for the majority of the East Midlands and ask for greater clarity over the basis on which decisions were taken, future plans for ending these restrictions and greater support for those businesses impacted.”

Five tests for continued coronavirus restrictions on business activity in the East Midlands

The five tests set out in June, when the Leicester lockdown came into effect, were:

1) Any decisions around closures must be based on evidence that can be shared with those affected and taken on as local a basis as possible

2) Businesses must be given enough time to make the practical preparations needed for closing and reopening

3) An exit strategy, including triggers for changes, must be made available to businesses to support them in their planning and decision-making

4) Businesses adversely impacted must be given additional grant support to compensate them for costs associated with being shut, losing trade and investment into making themselves Covid-secure

5) During closures, steps must be taken locally to reduce the risk of further disruption, including improvements made to testing and tracing

Scott added that clear, timely and consistent communication was vital in underpinning these tests.

While businesses accept the country was still learning about the nature of coronavirus in the spring and early summer, he believes there are no longer any reasons why the tests shouldn’t be met nine months on and asked for feedback from Government on decisions taken that affect the East Midlands.

“To be clear, this is not intended to be a petulant request,” he added. “Working with our members, we see the on-the-ground impact that restrictions are having in terms of business failure, livelihoods destroyed and jobs lost, along with the negative social and health fallout of this – which promises to have a longer-lasting and greater deleterious impact than the virus itself – and believe that our businesses and the communities they serve deserve better.”

The Chamber has also offered to work closer with the Government to ensure communication to and from businesses in the region works better than it has to date.

With recognition the pandemic will continue to impact lives for months to come, Scott added: “A strong, growing private sector will be central to securing our recovery and ultimate success. There is no alternative that anything other than a fully open and functioning economy will right the recovery of the region.

“Right now, businesses require more focused and enhanced support, both financial and to support in planning, in order to ensure as many as possible are fit for growth in 2021 and beyond. Meeting our tests will help ensure this happens.”

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