The latest labour market statistics have been released by the ONS this week and our TAME team has taken a look at what trends the data highlights across North.
Across the headline indicators, it’s a continuation of the themes we’ve seen in the past 12-18 months. The furlough scheme is continuing to do a good job at freezing the North’s labour market, and preserving jobs within the economy.
The economic activity rate captures the workforce of a region, which consists of those currently in employment, as well as any individuals who have actively been seeking employment in the past two weeks.
The long-term trend in the North is broadly similar to that of the UK as a whole, but at a lower rate. This suggests that there are some structural barriers in the North’s labour market, causing it to lag behind the UK’s performance, including a lack of access to training and jobs at the local and pan-Northern level.
There are signs of recovery in the unemployment rate, both in the North across the UK.
Since the turn of the year, the North and the UK have seen falls in their unemployment rates by 0.5 and 0.4 percentage points respectively. This means that, with a broadly constant economic activity rate, the economically active are able to find employment.
This is supported by the more experimental statistics published by the ONS, including the claimant count and the real time information on Pay as You Earn data.
The claimant count is a measure of the number of people claiming benefits principally for the reason of being unemployed. The claimant count reached its peak in the North in August 2020, and in the year since then has fallen by 1.1 percentage points, whilst falling slightly slower across the UK, with a 1.0 percentage point decrease in the past 12 months.
The driving force behind the slightly faster fall in the North has been the North East, which has seen a 1.5 percentage point decrease in the claimant count since August 2020.
The number of payrolled employees in the North has also rebounded to pre-pandemic levels across the North, despite the UK-wide figure still being 201,000 below February 2020 levels.
The observed increase of 130,000 payrolled employees in the North since April 2021 provides cause for cautious optimism, as these additional employees are likely to be at least partially, if not fully utilised in the workplace.
Some of these payrolled employees will be using the furlough scheme and there is a strong possibility that the end of the Coronavirus Job Retention Scheme at the end of September will bring about a fall in the number of payrolled employees.
If businesses have not fully recovered, or do not have the confidence that they will be able to continue trading through the coming months, redundancies and business closures could compress the number of payrolled employees once the furlough support is withdrawn.
September’s labour market statistics release will likely give some insight into the impact of the easing of restrictions on July 19, 2021, which saw many businesses, particularly in the hospitality industry, allowed to re-open or increase capacity.