The latest labour market data for the UK reveals a complex picture, with regional variations in employment, continued challenges in data reliability, and sectoral shifts in job distribution. While some areas have seen job growth, others continue to experience economic inactivity and fluctuating employment rates.
Challenges in Labour Market Estimates
Labour Force Survey (LFS) estimates remain affected by increased volatility due to smaller sample sizes, leading to potential inaccuracies in changes over time. As a result, these figures should be interpreted with caution and used alongside other labour market indicators, such as Workforce Jobs (WFJ), the Claimant Count, and Pay As You Earn (PAYE) Real Time Information (RTI).
Recent adjustments to data collection methods and an increased sample size over the past year may also be influencing recent movements in the LFS figures, in addition to actual labour market trends.
Despite these challenges, the LFS remains the primary data source for unemployment, economic inactivity, and self-employment, offering unique insights unavailable elsewhere.
Regional Employment Trends
Labour market conditions varied significantly across the UK between November 2024 and January 2025:
- Highest Employment Rate: The Southwest led with 79.1%, reflecting strong workforce participation.
- Lowest Employment Rate: Wales recorded the lowest at 69.9%, indicating regional disparities.
- Highest Unemployment Rate: London experienced the highest unemployment rate at 6.3%, suggesting job-seeking challenges in the capital.
- Lowest Unemployment Rate: Northern Ireland reported the lowest unemployment at just 1.5%.
- Economic Inactivity: Northern Ireland had the highest economic inactivity rate at 26.6%, while the Southwest had the lowest at 18.0%.
Regional Workforce Growth
Workforce jobs increased in 10 out of 12 UK regions between December 2023 and December 2024. London saw the largest increase, adding 170,000 jobs, reinforcing its position as the country’s economic hub.
Sectoral trends also varied:
- London continued to dominate the service sector, with 92.7% of jobs in services.
- The East Midlands had the highest proportion of production-sector jobs at 12.3%, highlighting its role in manufacturing and industrial work.
Payrolled Employees: Regional Changes
When comparing February 2025 with the previous year, changes in payrolled employees varied across the UK:
- Northern Ireland saw the biggest increase at 1.3%, reflecting a strong labour market performance.
- Scotland experienced a slight decline of 0.1%, indicating stagnation in employment growth.
These regional differences underline the importance of localized economic policies and targeted job support programs.
Conclusion
The UK labour market continues to evolve, with regional variations in employment and economic inactivity. While job growth remains strong in some areas, particularly London and Northern Ireland, others face persistent challenges.
Additionally, the reliability of employment data is an ongoing concern due to recent changes in data collection and increased volatility in survey estimates. Moving forward, a more comprehensive approach to labour market analysis, integrating multiple data sources, will be essential for accurately assessing trends and shaping effective employment policies.
Vacancies and jobs in the UK: March 2025
- Vacancy numbers are broadly unchanged on the quarter; early estimates suggest a small increase of just 1,000 (0.1%) vacancies to 816,000 in December 2024 to February 2025.
- Total estimated vacancies were down by 98,000 (10.7%) in December 2024 to February 2025 from the level of a year ago; however, they remained 20,000 (2.5%) above their pre-coronavirus (COVID-19) pandemic January to March 2020 levels.
- The number of unemployed people per vacancy was 1.9 in November 2024 to January 2025; this is up by 0.1 from 1.8 in the previous quarter (August to October 2024).
- The estimated number of workforce jobs was 36.9 million in December 2024; this is an increase of 155,000 (0.4%) from September 2024, with the largest increase in the employee jobs component, which rose by 131,000 (0.4%).
- The estimated number of workforce jobs was up by 403,000 (1.1%) in December 2024 from the level of a year ago; human health and social work activities and professional scientific and technical activities showed the largest increases of 178,000 (3.7%) and 120,000 (3.6%), respectively.
Office for National Statistics (ONS), published 20 March 2025, ONS website, statistical bulletin, Labour market in the regions of the UK: March 2025
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