Saturday, May 21, 2022

East Midlands unemployment rate drops – but acute skills shortage is hampering recovery

Unemployment in the East Midlands has dropped slightly and remains below the national average, according to the latest figures.

The region’s unemployment rate for the period between June and August 2021 was 4.3%, down by 0.1% compared to between May and July, the Office for National Statistics’ latest regional labour market report revealed.

And for the third successive month it was lower than the UK-wide figure, which dropped from 4.6% to 4.5% during the same timeframe.

Before this recent period, the region’s jobs market had consistently been hit harder than the rest of the country during almost the entire pandemic – peaking at 5.9% and 0.8% above the national average.

East Midlands Chamber Chief Executive, Scott Knowles, said: “After some concerning numbers at the beginning of this year, the unemployment rate appears to have stabilised as Covid-19 restrictions have been rolled back.

“This has enabled industries that are heavily represented in our region’s economy – including hospitality, retail, and leisure and tourism – to finally reopen fully and prove they have always remained viable if the trading environment allows.

“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 more than 1,000 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.”

While the UK’s September payrolls showed another monthly increase of 207,000 to 29.2 million, the headline figure was that job vacancies once again hit a record high, with 1.1 million jobs available between July and 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.

“We have skills gaps across the board that urgently need to be addressed – something that has been highlighted most pertinently by the HGV driver shortage during the ongoing 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 end of furlough is unlikely to be a silver bullet to the ongoing shortages and these recruitment difficulties will likely dampen the recovery by limiting businesses’ ability to fulfil orders and meet customer demand.

“More needs to be done to ensure businesses have access to skills when these can’t be recruited locally – including access to rapid and agile training and re-skilling opportunities for adults in the workforce, and a more flexible immigration system that allows firms to access the high and low-skilled workers they need.”

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