Our economy 2023 : Progress and challenges

Home Our Economy 2023Our economy 2023 : Progress and challenges

Introduction

Our Economy is a dive into the economic landscape of the North East. In this spotlight, we'll explore the state of our region’s economy.

From the Covid and Cost of Living challenge to resilience and employment growth. The world-class sectors leading the way. The inclusivity challenge we must address. And, finally, the insights we can gain from others worldwide.

Each of those areas is a crucial piece of the puzzle that tells the story of the North East’s economy.

Resilience and Employment Growth

The North East is known for its resilience. Despite the challenges of Covid and the Cost-of Living Crisis, we've witnessed strong employment growth.

Over 7,000 new jobs have been created through international investment in the past two years, with the North East creating more jobs through investment than anywhere outside of London.

Since 2014 we have added over 60,000 more jobs to the economy. We’ve also increased the total number of better jobs by 82,000, which is much more than we expected. This means there are many more in managerial and professional occupations today than there were in 2014, which is a great achievement.

North East unemployment has been falling faster than elsewhere and, earlier this year, the regional rate fell below the national unemployment rate for the first time, which is something worth celebrating.

World-Class Sectors Leading the Way

Our region's growth is driven by thriving sectors at the forefront of the global economy, supported by our SMEs, universities, hospitals, and other institutions.

We're leaders on Net Zero, with lower carbon emissions per capita than the national average. Over half of the regional jobs created through international investment last year were in the Net Zero sector.

Health and life sciences have also thrived. Records have been broken in pharmaceutical exports, backed by a robust regional value chain.

Digital tech and advanced manufacturing are other strong points in our economy, positioning us to harness the potential of FinTech, Electric Vehicles, and Artificial Intelligence.

Forecasts suggest an additional 50,000 new jobs will be created across the North East by 2035, with particularly high growth in engineering and technology, and the health profession.

The Inclusivity Challenge

Despite employment growth, we must address our low pay and low productivity challenge. Around 14% of employees in our region earn below the Living Wage, while productivity lags the national average.

Economic inactivity and ill health limit many residents' access to new opportunities, which is a concern. Sickness-related inactivity is at its highest rate since 2006/07. The ageing population in our region also presents unique challenges. We have a lower employment rate for 50 to 64 year olds than comparable areas and this has not returned to pre-Covid levels.

As the demand for more skilled jobs increases, we need to raise qualification levels, reduce the rate of young people not in employment, education or training, and attract and retain more graduates.

Evidence that identifies policy areas for development is critical for effective economic prosperity, which is why our accessible and timely regional evidence base is essential to driving forward policy.

Learning from Others

The challenge of improving inclusive productivity in the region is still formidable. But solutions do exist. Our goal for "Our Economy" this year is to explore what those solutions might look like for the North East.

We've assembled experts from around the country, pooling their knowledge from policy, education, and business, to discuss how to shape an inclusive and productive economy in practice.

We've also looked globally, identifying regions similar to ours in economic characteristics but with stronger productivity and inclusion. We have case studies from the West Midlands, New Zealand, Wisconsin, the Basque region, and Saxony.

You can read our full evidence base on the pages below.