West Midlands sees big Q4 unemployment rise

Unemployment in the West Midlands rose sharply in the final quarter of 2016, latest figures from the Office for National Statistics have shown.

For the October to December quarter unemployment in the region stood at 168,000, a rate of 5.9%, an increase of 17,000 (0.6%) on the July to September quarter and up 21,000 on the figure for the October to December period in 2015.

Disappointingly, the employment rate was 72.2%, down 1.2% on the July to September quarter but up 0.9% on the figure for the corresponding period in 2015.

The performance goes against the long-term trend and is especially disappointing when compared with the national figures.

Nationally, the employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.6%, the highest since comparable records began in 1971.

Meanwhile, there were 1.60 million unemployed people, little changed compared with July to September 2016 but 97,000 fewer than for a year earlier.

The national unemployment rate for the period was 4.8%, down from 5.1% from a year earlier. The rate has not been lower since July to September 2005.

Latest estimates show that average weekly earnings increased by 2.6%, both including and excluding bonuses, compared with a year earlier.

Business leaders in Greater Birmingham said they were not panicked by the figures and were remaining “cautiously optimistic” about the region’s economic outlook.

Greater Birmingham Chamber of Commerce chief executive Paul Faulkner said the Q4 figures for the West Midlands were a result of unusually high estimates in the period from July to September.

He said: “At first glance (the) regional labour market figures look somewhat challenging with our employment rate dipping and the unemployment rate rising during the fourth quarter of 2016.

“However, in its statistical release the ONS identifies that these figures reflect their unusually high estimates in July to September 2016 for the West Midlands and that, in general, the employment rate has remained relatively stable in recent periods.

“Indeed, the results of our latest Quarterly Business Report for Q4 2016 indicate that more than a third of regional firms are seeing an increase in their workforce and that more businesses are seeking to recruit.”

He said the ONS data showed the West Midlands having the second largest increase of workforce jobs between June and September 2016, with 29,000 jobs being generated by the regional economy.

“All things considered, we are cautiously optimistic that (the) statistics are an outlier and that the economy is performing well. Nevertheless, we will be watching the next set of labour market figures closely to confirm this,” he added.

In Coventry and Warwickshire, where the chamber of commerce monitors results on a month-by-month basis, unemployment by claimant count rose in January from 4,035 to 4,260 in Coventry and, in Warwickshire, it went from 3,505 to 3,705.

Louise Bennett, chief executive of the CWCC, said: “It’s a concerning rise and it’s something we must certainly keep a very close watch on in the coming weeks and months.

“January does tend to see an increase because of the seasonal jobs growth in the run up to Christmas and, only last month, we were highlighting that unemployment had halved in four years.

“So we shouldn’t set alarm bells ringing just yet but, equally, we must make sure we monitor whether this becomes a trend.”