RIU North West labour market remains fragile The latest labour market statistics provide a mixed picture of the UK labour market in the three months to April 2011. Encouragingly, unemployment fell by 88,000 whilst employment increased by 80,000, indicating that the vast majority of individuals moving out of unemployment had found work. The decline in UK unemployment was the largest since 2000, with numbers reaching their lowest level for nearly two years. However in contrast, claimant figures provide a more negative view of the UK labour market. The number of people claiming job seekers allowance increased by 19,600 in May, the third consecutive month of increase, and the biggest rise since July 2009; the claimant count total now stands at 1.4 million. Some encouragement can be taken from private sector job creation which increased by 104,000 in the first quarter of the year, in comparison public sector job numbers declined by 24,000. More than half the increases in employment came from full-time jobs, a further positive. However many analysts still view the UK labour market as fragile, expectations remain that unemployment will increase again over coming months as the full impacts of government spending cuts hit. The latest labour market statistics are much less encouraging for the North West, in the three months to April employment declined by 29,000 whilst unemployment increased by 13,000 and inactivity increased by 15,000. This represents the third consecutive month in which the North West labour market performance has significantly lagged the UK. Over the last three months only the North West, Yorkshire and the Humber and the South West experienced a decline in employment, with the North West recording by far the largest fall. The East of England, South West and North West were the only regions to see unemployment numbers increase. The region saw an increase in Job Seekers Allowance claimants in May, with 185,100 people
registered, up 3,100 on the previous month. All regions experienced an increase in claimant numbers over the month, with the North West recording the largest rise. Looking forward, the threat of further public sector cuts could disproportionately impact the region. Data indicates that men accounted for virtually all of the employment increase over the quarter to April continuing a trend seen over several months; of the 80,000 total employment gain, 70,000 were male. Youth unemployment numbers declined by 79,000 in the three months to April to stand at 895,000 or 19.3%, however over the same period the employment level within the cohort increased by only 12,000. Latest data highlights a significant movement into economic inactivity. Economic inactivity within this age cohort is a concern given the potential for long-term disengagement from the labour market; efforts need to be made to ensure individuals have skills relevant to the job market. At a local level 12 out of the 39 local authority districts saw an increase in claimant numbers in May compared with 21 in April. Blackburn with Darwen experienced the largest absolute increase of 180 (4.5%) followed by the Wirral 117 (1.3%); all other districts experienced small increases. The largest absolute declines in claimant numbers came in Blackpool -165 (-3.1%), Cheshire West and Chester -158 (-2.5%), Wigan -154 (-1.8%), Bolton -138 (1.7%), Liverpool -133 (-0.6%) and St Helens -126 (-2.4%). The largest percentage declines came in Eden -7.5%, Fylde -4.6% and South Lakeland 3.7%; however these declines came on a small base. Regional data continues to indicate that since the middle of 2010 the recovery in the labour market has faltered. The fragility of the North West labour market suggested by recent trends highlights the need to further stimulate private sector job creation in the region.
If you would like to know more about the RIU, please contact Nicola Christie on 01925 400293 or Nicola.Christie@nwda.co.uk.