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Jessie Kelly‑Baxter, senior policy advisor at the North East Chamber of Commerce, said:
The ONS employment figures released today (15 April 2025) show that the North East continues to have the highest rate of economic inactivity in England at 26.9%. This means over a quarter of working-age people in our region are neither in work nor actively seeking work, presenting a persistent challenge for the North East economy.
The ONS has stated that some volatility remains in its Labour Force Survey due to smaller sample sizes. However, the latest figures covering the period December 2024 to February 2025 show that economic inactivity among those aged 16–64 has increased by 0.8% since the previous dataset. This is 5.5% higher than the UK average of 21.4%.
Unemployment for those aged 16 and over has also increased slightly to 4.8%, up 0.1% from last month. This is 0.4% above the UK average. The region’s employment rate for 16–64-year-olds has fallen by 0.8%, now standing at 69.7% – that is 5.4% lower than the UK average of 75.1%.
The latest figures tie closely with a newly published report from the Chamber’s Local Skills Improvement Plans (LSIPs), which highlights that 23.1% of adults in the North East are functionally illiterate – a major barrier to entering and progressing in the labour market. The LSIPs are also exploring the link between poverty and access to skills, as financial pressures often prevent individuals from upskilling or retraining.
Our Quarterly Economic Survey (QES) also supports the ONS data, showing that fewer businesses are recruiting for part-time or permanent positions. While there has been an increase in full-time recruitment, the fall in flexible opportunities may make it harder for those with caring responsibilities or long-term health conditions to access work that suits their needs.
The QES also revealed growing caution among North East businesses when it comes to future planning. This is particularly relevant given the rapidly evolving situation around US tariffs. See here to read more on the QES.
Additional ONS data released today provides further insight into the reasons behind economic inactivity in the North East. Covering the period from January to December 2024, it shows that long-term sickness remains the most common reason for inactivity, accounting for 33.5% of those not in the labour market – the highest level in England and 5.3% above the UK average of 28.2%. However, this figure has fallen slightly from 34.6% in the previous dataset.
While this small decrease is welcome, tackling long-term health conditions as a barrier to work remains a key priority. The North East Combined Authority’s Economic Inactivity Trailblazer and the Tees Valley Combined Authority’s Youth Guarantee Trailblazer will bring targeted investment into the region to address this challenge. These initiatives sit alongside the UK Government’s ‘Get Britain Working’ strategy and its Connect to Work Scheme.
We will continue to work closely with both Combined Authorities to support cross-regional collaboration and ensure that these interventions deliver real impact. We will also continue to engage with the UK Government and make the case for a stronger, fairer North East.
We are North East business, and we will continue to support, connect and represent our members. By working together with our regional partners and national government, we can reduce economic inactivity and drive growth across the North East.
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