Unemployment figures giving cause for concern in the West Midlands

UNEMPLOYMENT in the West Midlands has risen at a faster rate than anywhere else in the country for the second month in succession.

Latest figures show an increase in the region’s jobless total of 17,000.

The figures from the Office for National Statistics cover the May to July period and so take in some of the economic shockwave experienced following the EU referendum.

Business leaders in the region were quick to try and spin the decline as a quirk exposed by a fall in activity levels.

However, other regions did not experience the same problems and so concerns are mounting that there could be a long-term softening in the labour market.

Analysts will be keeping a close eye on the figures for next month as recent economic indicators have shown an improvement in the situation in August, strengthening hopes there was just a knee-jerk reaction to Brexit.

In detail, the region’s figures show unemployment grew to 176,000 in the three months to July, an increase of 17,000 – a rate of 6.2% – on the February to April quarter.

Of more concern, the figures are up 19,000 on the same quarter last year, halting the long-term decline.

Slightly more encouraging was the 0.4% rise in the region’s employment total.

Greater Birmingham Chambers of Commerce chief executive Paul Faulkner said: “We welcome the rise in both the national and West Midlands employment rate, and that the uncertainty in the run up to the EU Referendum did not affect employment growth.  

“This quirk in the statistics is the result of a fall in the inactivity rate, but suggests the labour market could soften in future.  

“We are shortly to release the results of our latest Quarterly Business Report and will be examining local employment trends carefully in light of this.”

He added that despite the mixed picture with employment, other recent statistics had demonstrated that the economy had recovered from its temporary post-referendum blip.  

“In the West Midlands in particular there are many opportunities to get excited about, including HS2,” he added.
 
“Today, Birmingham has announced a £1bn investment for redevelopment in the city region as part of the HS2 transformation, expected to create 36,000 jobs and 4,000 new homes.  

“We thoroughly welcome the support from the Prime Minister for this investment programme.”  

In Coventry and Warwickshire – where the chamber of commerce collates unemployment figures on a monthly basis – August saw a marginal drop.

In Coventry, the total number dropped from 4,455 to 4,435 and in Warwickshire there was a fall from 3,370 to 3,355 – meaning an overall fall of 35 across the city and the county.

Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “We welcome a fall in unemployment across the area – even though it’s only a small drop.

“Against a backdrop of uncertainty, we are pleased to see that businesses are still looking to grow but, of course, we want to ensure that they can expand even further, grow our economy and create new jobs.”