Manchester economists call for action after figures reveal North West rising unemployment rates

By Michael Kelleher

Leading Manchester economists have called on the government to act after latest figures revealed rising North West unemployment rates.

Unemployment figures rose to 8.6% between November and January with 301,000 people now unemployed in the region, according to a new report from the Office for National Statistics.

Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, believes investing in infrastructure, and thereby boosting the construction sector, will help the North West’s economy.

“The headline numbers for the claimant count could increase further in the coming months as public sector losses occur, though these should be muted as the private sector creates jobs,” he said.

“However the level of unemployment in this region remains well above the national average. This is unacceptable, but does offer the capacity for growth in the future.

“Government could address unemployment and the needs of businesses in the North West by targeting any savings announced in the Budget at the region’s infrastructure needs.

“This could provide the funds to start the Northern Hub rail project immediately or a host of other projects to get the construction sector moving.”

The North West unemployment rate of 8.6% is well above the UK average of 7.8% and a lot higher than the UK’s lowest unemployment rate of 5.8% in the South West.

According to latest ONS figures, the number of people claiming jobseeker’s allowance (JSA) in Greater Manchester rose to 86,600 in February – an increase of 1.7% from January.

Baron Frankal, director of economic strategy at New Economy, admitted increasing unemployment numbers reflect Greater Manchester’s difficult economic conditions and he expects a continued rise.

“The JSA figures for February serve to highlight the ongoing difficulties faced by those trying to re-enter the labour market,” he said.

“The total number of claimants continues to increase on a monthly basis across Greater Manchester.

“As the Chancellor himself has noted, there is no magic wand that can be waved in order to accelerate economic growth.

“The key to any long-term recovery will be to give areas such as Greater Manchester more power to determine their own economic futures.”

He called the government’s announcement to accept 81 of 89 recommendations outlined in Lord Heseltine’s Growth Plan “a step in the right direction”.

Youth employment has also been negatively affected in the North West with 417,000 people aged between 16 and 24 now employed – a decrease of 1.2% from last year.

Paul Fletcher, development director at youth unemployment charity Rathbone, says a lack of industry in the north of England is the reason for the figures.

“There are a lot of structural unemployment black spots for young people around the North West,” he said.

“20 to 30 years ago most young people that wanted a job could get one but they tended to be in things like factories, mining, ship-building and construction,” he said.

“A lot of those jobs have now gone and the new jobs in things like IT and the service industry are not in the same places as the old industries were.

“Most of the new industries are based predominantly south of Birmingham.”

Picture courtesy of Helen Cobain, with thanks.

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