South East: EY report highlights youth unemployment in manufacturing

A recent report by EY shows that the South East rate of youth unemployment at 12.6% is well below the UK average of 14.4%. This blanket figure, however, conceals two things: the much higher rate in the cities, with figures of 15.4% for Southampton and 13.5% for Reading; and the fact that youth-employment levels across the UK have actually declined by 166,000 from 2004 to 2015, with the biggest fall seen in the manufacturing sector, with a decline of 109,000 (28%) over the same period and a comparable fall in construction of 25%.  This decline, the report concludes, makes it imperative that that future skills development should be delivered against those target industries that support access to employment for young people, high-tech manufacturing being one of the most important sectors for growth in the South East.

The report, brought out by EY in association with the EY Foundation, an independent UK charity, argues that the disparities could have an impact on both the region and wider UK’s aspiration to achieve “inclusive growth”, particularly at a time when the UK’s future supply of labour and skills is at the forefront of many employers’ minds after the Brexit vote in June.

Richard Baker, managing partner at EY across the Thames Valley and South Coast, said: “Youth unemployment rates have fallen from the peaks we saw during the recession, when 40% of the UK’s 16-17 year olds were facing unemployment. However, a stubbornly high number of young people remain excluded from the labour market, which could be further exacerbated by a period of weaker economic growth in a Brexit environment.”

The report highlights the fact that, given the commitment of the new Prime Minister to fund an industrial strategy, it’s significant that the sectors young people are most likely to have difficulty finding employment opportunities in are mining and utilities, and manufacturing. Both sectors are expected to see a fall in employment levels up to 2030 and already tend to employ fewer than average young people (9% for mining and utilities, and 9.6% for manufacturing, compared to all sectors 12.8%).

Maryanne Matthews, chief executive of the EY Foundation, commented: “It is imperative that UK employers open their doors to invest in developing the appropriate skills of young people. By offering paid work experience opportunities to young people, this could lead to jobs in the future, reduce unemployment rates and help to address the UK skills gap.”