Latest job figures highlight impact of rising employment costs – Chamber
Business leaders in Greater Birmingham today called on Government to give businesses more freedom to invest in their workforce – as new figures highlight the impact of rising employment costs.
According to the Office for National Statistics (ONS), the West Midlands employment rate fell by 1.5 per cent in the first quarter of 2025.
Over the same period, the unemployment rate in the region rose by 0.2 per cent to 4.5 per cent and economic inactivity increased by 1.6 per cent to 23.8 per cent.
Compared with the same period last year (January to March 2024), the employment rate in the West Midlands has fallen by 1.2 per cent, unemployment has decreased by 0.6 per cent and economic inactivity has increased by 1.6 per cent.
Meanwhile, the estimated number of vacancies in the UK fell by 42,000 on the quarter, to 761,000 - a 34th consecutive quarterly decline.
The ONS said average regular earnings growth fell to 5.6 per cent in the three months to March – the lowest level since the three months to November 2024.
But wages still outstripped inflation, rising by 2.6 per cent after taking Consumer Prices Index inflation into account.
Emily Stubbs (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: “These figures highlight notably different labour market trends between the West Midlands and the country as a whole.
"Nationally, the employment rate has risen over the past year, while economic inactivity has declined.
“Comparatively, in the West Midlands, the proportion of the population in employment has declined, whilst the rate of economic inactivity has seen an increase.
“Meanwhile, despite a slowdown in the pace of salary increases, these remain significantly above inflation, and we know the rising cost of employment is a major challenge for employers, in Greater Birmingham and nationally.
“Yesterday's announcements around immigration are likely to exacerbate employment costs for many firms who have tried all they can to recruit and train people from the local labour market but find access to global talent the only solution to addressing urgent skills shortages.
“Business and government alike both want to fill job vacancies with UK talent and to train and upskill our workforces. To achieve this, government must double down on plans to boost technical and vocational skills and help more people back into work.
“Easing the cost pressures on business to give them more freedom to invest in their workforce is a critical part of this.
“Further additional costs associated with changes to employment rights also loom large in the background.
“While government is consulting business, this legislation as it stands threatens to add even more to employment bills.”
The GBCC is currently surveying for its next Quarterly Business Report, which will help stakeholders across the region to better understand the challenges Greater Birmingham businesses are facing.
