West Midlands ‘NEETs’ could add £100m to the economy - report

West Midlands NEETs – people not in education, employment or training - could potentially add £100m to the UK GDP if they were to join the labour force, according to analysis from PwC.

PwC UK’s Youth Employment Index tracks the progress of youth employment outcomes across the UK regions, looking at metrics including labour market participation, quality of work and skills acquisition.

Analysis shows that the West Midlands NEET levels decreased from 14 per cent in 2023, to 12 per cent last year.    

Northern Ireland is now the benchmark for reducing the share of young people who are NEET, with 9 per cent of 16 to 24 years olds classed as NEET, while Scotland (16 per cent) is at the other end of the scale.

PwC analysis indicates that reducing regional disparities and getting more young people into employment under initiatives such as the government’s Youth Guarantee could boost GDP by around £13 billion to £26 billion if this gap to Northern Ireland was reduced.  

The report finds that the three main drivers to the UK’s deteriorating performance are cyclical pressures (the overall UK labour market has cooled, with young workers being disproportionately impacted), a lull in graduate employment lull to its lowest level since 2014 and rising economic inactivity, with a growing share of young people are becoming economically inactive, driven by a larger pool of students and an increase in long-term sickness.

However, there is little indication of AI impacting youth employment, the data says.

Longer term, young people are optimistic about AI impact. PwC’s Hope and Fears survey found Gen Z workers feel more excited about how AI will affect their careers over the next three years compared to Gen X - expecting to see an increase across productivity (67 per cent vs 39 per cent), salary (47 per cent vs 18 per cent), and job security (48 per cent vs 16 per cent).  

David Morris (pictured), market senior partner, West Midlands, PwC UK said:  “It’s encouraging to see the levels of NEET going in the right direction in the West Midlands.

“Progress is good but there is still significant potential to unlock. Getting our young people into the workforce must be a priority, and recent government announcements such as the Youth Guarantee should make a difference.  

“The region is home to a young and diverse population, more than the national average, and the challenge now is to ensure that the young people in our region are supported, skilled and aligned with future workforce needs.

“With issues like mental health noted as a key driver for NEET levels, creating environments where young people can thrive and adapt is imperative.

“The West Midlands is central to the economic ambitions of the UK, focused, purposeful and strategic efforts will be key to harnessing the untapped potential of our young workforce.”