Wales unemployment falls by 12,000 to 6.7%

Sarah Dickins visits Hydro Industries in Carmarthenshire, which is expanding

The unemployment rate in Wales has fallen to 6.7% compared with 7.2% for the UK over the last quarter.

Wales has seen the largest fall in unemployment in all UK nations and regions over the last year, said UK Employment Minister Esther McVey.

The Office for National Statistics figures show the jobless total in Wales fell by 12,000 over the last quarter.

Only the south east, south west and east of England have lower rates of unemployment.

Ms McVey said: "The employment rate in Wales is 71%, up 2.1 points on the year - the largest annual increase out of all UK nations and regions - which shows that the growing economy is helping people to find a job, turn their lives around and have the security of a regular wage."

The figures showed a slight increase in youth unemployment levels over the past month but, over the year as a whole, it had decreased by 5,300 in Wales, according to the Wales Office.

Analysis

Both the Welsh and UK governments claim the figures are proof that their policies are working and producing more jobs in Wales but care needs to be taken.

Today's figures show that there are 12,000 fewer unemployed people in Wales now than in the figures released a month ago.

But at the same time it's important to note that there are only 1,000 more people in employment. So where are the other 11,000?

The answer is that the other 11,000 are what is called economically inactive. They may be sick, caring for someone else or may have taken early retirement.

That doesn't take away the fact that the employment rate in Wales is increasing three times faster than the UK average, nor that Wales has seen the biggest increase in employment in the UK in the last year. Both are important and good news for our economy.

But it is a warning that when we see a drop in the numbers of people unemployed, it doesn't necessarily mean they are all working.

The last time unemployment in Wales was at this level was October 2008. Unemployment in Wales has been falling in recent months but not as steeply as today's figures suggest. We can't yet be sure whether this is a trend or a blip.

First Minister Carwyn Jones said: "With employment rates in Wales increasing by three times the UK average, today's figures also show that youth unemployment is falling faster in Wales than the UK, economic inactivity is now close to a record low, and Wales has seen the biggest increase in private sector employment over the past 12 months."

Zero hours contracts

The number of people out of work in the UK fell by 63,000 to 2.33 million in the three months to January 2014. The unemployment rate of 7.2% is down from 7.4% in the previous three months.

The number of people in employment rose to a record total of 30.19 million.

The last time the unemployment rate was 6.7% in Wales was the three months to October 2008.

Since then it peaked at 9.4% in the three months to March 2010.

Dr Kath Ringwald, from the University of South Wales Business School, said the figures had been improving but offered little to "shout about" as zero hours contracts were becoming part of the "fabric of the employment scene" in Wales and with pay lower than in other parts of the UK.

But she said surveys of employers showed Welsh firms appeared positive about taking on more staff in the year ahead, with Wales' construction sector currently "doing very well".

The Welsh government attributed the improving jobs picture on programmes like its Wales Economic Growth Fund which includes a non-repayable grant to encourage business and social enterprise.

It also started its Jobs Growth Wales programme in April 2012 to get 16-24 year olds into work, creating a job opportunity for a six month period paid at or above national minimum wage.

Secretary of State for Wales David Jones said the figures showed "encouraging signs of growth and recovery in Wales" but there was work to do to help young people.

"The fact that we have seen a small increase in the levels of youth unemployment shows that the job is not yet done," he said.

Lee Waters, director of independent think tank the Institute of Welsh Affairs, also said "further intervention" was required to help more young people to get into work.

"The overall [jobs] trend is encouraging but youth unemployment is still a concern," he said.

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