The South West of the UK – where one in ten people previously worked in food and hospitality has been hit hardest by Covid job losses, according to analysis from work tech company Orka.
The unemployment rate in the South West was 3.1% over the months of January to March, one of the lowest levels across the UK. However, this figure had jumped to 3.8% in the latest jobs data released last week, with 20,000 more people now officially seeking work.
The region has the highest proportion of workers in accommodation and food services of anywhere in the UK, at 9.6% of its workforce. The restaurant and hospitality industries were dealt a hammer blow in March as lockdown was implemented and tens of thousands of job cuts have followed.
Orka looked at ONS’ latest Business Register and Employment Survey, alongside jobs figures published last week, which showed that the UK’s unemployment rate had reached its highest level in two years.
Table showing shift in unemployment rate across the UK and industry representations in each region/country:
| UK region | Unemployment rate Jan-Mar | Unemployment rate May-July | Percentage point change in unemployment since Covid hit | Percentage of workforce in retail sector | Percentage of workforce in accommodation and food services | Percentage of workforce in manufacturing |
| UK | 3.9 | 4.1 | -0.2 | |||
| England | 4.0 | 4.1 | -0.1 | |||
| North East | 5.4 | 5.2 | 0.2 | 10.0% | 7.2% | 10.6% |
| North West | 4.0 | 3.5 | 0.5 | 10.5% | 7.1% | 9.3% |
| Yorkshire and The Humber | 4.3 | 4.0 | 0.3 | 9.2% | 7.3% | 11.5% |
| East Midlands | 3.8 | 4.4 | -0.6 | 9.2% | 6.8% | 12.4% |
| West Midlands | 5.0 | 4.4 | 0.6 | 9.0% | 5.8% | 11.6% |
| East | 3.7 | 3.7 | 0 | 9.6% | 6.6% | 7.4% |
| London | 4.7 | 5.0 | -0.3 | 8.2% | 8.4% | 2.1% |
| South East | 2.9 | 3.5 | -0.6 | 9.6% | 7.3% | 6.2% |
| South West | 3.1 | 3.8 | -0.7 | 9.5% | 9.6% | 8.2% |
| Wales | 3.2 | 3.1 | 0.1 | 9.9% | 7.9% | 10.7% |
| Scotland | 4.1 | 4.6 | -0.5 | 8.9% | 7.9% | 6.9% |
| Northern Ireland | 2.4 | 2.9 | -0.5 | 11.0% | 5.6% | 10.5% |
The South East and the East Midlands have fared similarly badly, both seeing their unemployment rates jump by 0.6 percentage points, to 3.5% and 4.4% respectively.
The East Midlands is likely to have felt the impact of significant job cuts in the manufacturing sector[3], given that the industry previously employed 12.4% of its workforce, a considerably higher proportion than anywhere else in the UK.
While Northern Ireland currently has the lowest level of unemployment of anywhere in the UK, the country has seen its unemployment rate leap 0.5% since the onset of Covid. This may well have been driven by the fact that Northern Ireland has the highest proportionate number of retail workers of anywhere else, with 11% of its workforce previously occupied in the sector.
The Orka analysis also reveals that some UK regions have actually seen their unemployment rates fall in the last five months, with the West Midlands dropping 0.6 percentage points to 4.4% and the North West dropping 0.5 percentage points to 3.5%.
The West Midlands has a lower than average percentage of workers in hospitality, food and retail, potentially explaining the region’s resilience to Covid job losses. Both regions are also home are two of the UK’s biggest cities in Manchester and Birmingham, with growing digital economies and a high proportion of office jobs potentially helping the regions to weather the storm.
Tom Pickersgill, CEO and co-founder of Orka, said, “The jobs market has been turned on its head in the last six months, but the story is not the same in every industry and from looking at the data, there are clearly a lot of companies still hiring. I believe that while permanent 9-5 jobs will take time to recover, in the coming months, we will see a massive rise in temporary work arrangements.
“For those who have been unfortunate enough to lose their jobs as a result of Covid and are now looking for new work, it’s worth focusing on industries which you know are in good health while also registering on work platforms, which can allow you to start bringing money in without endless applications and interviews.”
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