Hucknall and Bulwell: Unemployment down again but business chiefs want more done to help young people replace retiring workers

A leading business body says new pathways are needed for younger people to replace retiring workers as record-low regional unemployment rate disguises key issues

Tuesday, 17th May 2022, 1:30 pm

The East Midlands’ unemployment rate remains the second-lowest in the country after falling for the fifth consecutive month, according to the Office for National Statistics’ (ONS) regional labour market figures.

However, the region’s 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 – continues to climb to 21.9 per cent, up by 0.8 percentage points from a year earlier and above the 21.4 per cent national average.

Despite the low unemployment rate, the ONS said the number of people in jobs was still below pre-Covid levels, while regular pay fell by 1.2 per cent when adjusted for the impact of inflation, which hit a 30-year high at seven per cent in March.

Scott Knowles says low unemployment rates are masking recruitment issues in sectors like manufacturing, construction and engineering

East Midlands businesses have steered economic recovery but now need support to continue growing

Scott Knowles, East Midlands Chamber chief executive, said: “At first glance, the unemployment rate falling for the fifth month in succession to hit yet another record low is hugely positive for the region’s labour force.

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"It is largely testament to the success of our businesses in steering a strong rebound for our local economy as they got back to what they do best once Covid-19 restrictions were repealed.

“However, these figures disguise a historic hiring crunch facing many of our companies.

“In an increasingly tight labour market, competition for skills is ramping up wage costs, leaving many firms unable to recruit the people they need given the other increasing overheads they face, such as energy and raw materials.

“Recent increases in economic inactivity have been driven by those aged 50 to 64 leaving the workforce, according to the ONS, so it’s clear we need to find pathways to get younger people into industries including manufacturing, construction and engineering, which are among those struggling the most in recruitment.

“With the economic recovery now on a knife-edge, it’s imperative the Government does more to help people access retraining opportunities for in-demand jobs.

"Introducing a new skills tax credit would also incentivise employers to invest in training so we can grow our next generation of skilled workers.”