The East Midlands’ unemployment rate remains the second-lowest in the country, after it was recorded at 2.7% for the period between February and April 2022.
This came in at 1.1% below the national average of 3.8%, with only Northern Ireland (2.6%) lower, according to the Office for National Statistics’ latest regional labour market figures published today (14 June).
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, long-term ill health or studying – climbed by three-tenths of a percentage point to 22.2%, which is well above the UK average of 21.3%.
The latest data follows confirmation the UK’s GDP shrunk by 0.3% in April.
East Midlands Chamber chief executive Scott Knowles said: “While on the face of it a low unemployment rate is a positive for the region’s labour force, this trend shows there is a major constrain on businesses when it comes to finding the staff they need to fill key jobs.
“The ONS figures reflect what we are finding in the East Midlands, where two-thirds (66%) of businesses attempted to recruit new employees in the second quarter of the year but 82% of these struggled to find people, according to our latest Quarterly Economic Survey.
“Four in 10 businesses told us they are now at full capacity, which strongly suggests they need staff to meet high demand. From our conversations with members, industries such as manufacturing – which are important drivers of economic output – are struggling the most due to early retirement among workers and a lack of skilled workers to replace them.
“When combined with inflationary pressures that are now hitting cashflow and investment intentions, this perhaps explains why GDP has now dropped as ultimately businesses are constricted in their ability to make the productivity gains that will drive the economic recovery.
“We need to find ways of bringing people back into our labour market. Flexible working practices, rapid retraining opportunities and a focus on workplace health can support many economically inactive people to return to the workplace.
“But for some roles where there is clear evidence of a national skills shortage, firms need access to people at all skill levels from outside the UK. As well as issuing temporary and seasonal visas, the Government needs to urgently review the shortage occupation list.”
