Summary
The North East is experiencing demographic change; as in much of the rest of the UK, the region’s population is growing, ageing and becoming more diverse. The region has also shown improvement in skills and labour market indicators, but the current recession has driven up unemployment and the long-term impact remains to be seen.
The people section of the state of the region examines the population of the North East from a largely economic perspective. For information relating to the health and well-being of the population please refer to the Place section
The people section is divided into the following five chapters:
- Population
- Migration
- Labour Market
- Skills
- Equality and Diversity
The North East population
Demographic change is taking place in the North East population, with projections showing expected changes in the total number of people due to both migration and natural change, changes in the proportions of people in different age groups, and changes in composition of households. Population changes impact on just about every aspect of society from the economy to the environment and as such understanding the implications of such changes are vital.
The population of the North East stands at just 2.5 million people. In terms of population that makes the region the smallest in England, and the one which has experienced the lowest growth over the past ten years. That said, the region’s population began to increase after 2001 as a result of an increase in the number of migrants, especially those coming from eastern Europe. The recent increase has had an impact on the population projections produced by the Office for National Statistics, which suggest a modest increase over the period to 2031. That projected increase is lower than that for other regions, however.
These factors are likely to have widespread implications on policy areas such as housing provision, health care and the labour market. The region has a comparatively low proportion of people from black and minority ethnic (BME) backgrounds, with the majority of those being of Asian background. However, the proportion from BME backgrounds appears to have doubled since 2001. However, the distribution of ethnic minority population within the UK is highly uneven with approaching half of all ethnic minority population residing in London. As with many regions, there are concentrations of people from BME groups in certain areas, most notably Newcastle and Middlesbrough.
The labour market is a key mechanism in any economy and is concerned with how workers and employers interact and the resulting pattern of wages, employment and income. The 2006 Regional Economic Strategy (RES) identified low rates of economic participation and worklessness as key elements of the economic output gap the region faces relative to the rest of the UK. In recent years the North East has shown improvement, in both absolute and relative terms, across a wide range of labour market indicators – but still lags behind the UK average in most areas of the labour market.
This is particularly evident in the employment rates for the North East – which over the last 10 years have decreased considerably and the gap with the rest of the UK has noticeably reduced. However, overall unemployment rates remain amongst the highest in the country and the most recent data shows a widening of the gap emerging during the current recession.
As well as unemployment and economic inactivity being relatively high in the region, the earnings of the North East’s employees are comparatively low, but earnings in the region compared to the UK have improved since 2003.
The rise in migration from 2002 onwards has resulted in a rise of migrant workers supplementing the North East workforce. Research suggests that the majority of migrant workers are under 34 years old and that many work in jobs at the lower end of the occupational spectrum, often earning low wages. Data from the Workers Registration Scheme (WRS) shows that a very small number of migrant workers enter work in high level occupations including hospital consultants and mechanical engineers.
Skills levels among the North East population have increased considerably over recent years. The number of young people and adults qualified to at least Level 2 or Level 3 has increased substantially to the point where it is now equivalent or better than the national average. However, there are still substantial numbers of people in the region without qualifications or with qualifications below Level 2. This is particularly true among older sections of the population. These remain a primary target of publicly-funded skills programmes as low qualifications are a significant barrier to the labour market. There are also relatively low numbers of people qualified at higher levels (Level 4 and above) to drive the high skill economy that the region is seeking to develop.
Overall there is evidence to suggest improvements in levels of qualification, employment and increasing population are contributing to the improving economy of the region. In order to meet the economic growth targets set out in the 2006 RES, these improvements will need to continue - and the full impact of the recession remains to be seen. Migration into the region is contributing to GVA growth, but to have the greatest impact on GVA per head, the increasing number of migrants will need to be highly qualified and employed in jobs requiring high skills levels.