More than one-in-four working-age people in the North East now 'economically inactive'

More than a quarter of potential workers in the North East are now classed as ‘economically inactive’ - and the problem is getting worse.

The region has the UK’s highest rate of working age people not looking for a job or unable to start work, new Office for National Statistics figures reveal

Data released today, Tuesday, April 16, show the economic inactivity rate for people aged 16-64 in the North East is 26.9%, 4.7% higher than the national average and a rise of 2% compared to December 2023-February 2024. 

In contrast, the North East’s employment rate for those aged 16-64 is 4.1% lower than the national average. Nationwide, 74.5% of the age group is in work. In the North East, the figure is just 70.4%.

Between December 2023 and February 2024, the unemployment rate in the North East for over-16s was 0.6% lower than the national average, but after recent changes to the way the figures are calculated, it remains to be seen whether this is a long-term trend.

North East England Chamber of Commerce policy manager Marianne O’Sullivan said feedback from businesses suggested the region’s job market was expanding: “Our Quarterly Economic Survey covering February to March 2024 shows that there has been an increase in businesses looking for staff, with demand for full-time, temporary and permanent positions all rising,” she said.

“High levels of economic inactivity results in losing potential jobseekers that could add value to their workforce.”

More needed to be done to address the problem long-term, she said: “Ill health is a key reason behind economic inactivity. Occupational health is a key element to getting people back into work and supporting people to remain within the workforce.

“We are working with our members, the Department for Work and Pensions and the British Chambers of Commerce to understand more about employer sentiment when it comes to occupational health and how businesses can be supported to incorporate occupational healthcare into their workforce strategy. “