finance
Birmingham's jobless rate hits 5.7% despite record employment levels
Unemployment at 5.7 percent and economic inactivity at 23.1 percent continue to weigh on the local labour market despite record employment levels.
How we reported this
Greater Birmingham recorded an unemployment rate of 5.7 percent in the year to June 2025, according to Office for National Statistics data. That figure sits well above the UK average of 4.1 percent and signals ongoing pressure on local hiring.
Why the gap matters for the city
The employment rate reached 72.2 percent, the highest in the city’s modern records, yet still falls short of the national 80 percent target set by government policy. Employers in public services and retail report difficulty filling shifts even as overall participation lags. The shortfall leaves thousands of working-age residents outside the labour force at a time when national recovery measures have prioritised job creation.
Economic inactivity stood at 23.1 percent between July 2024 and June 2025, 1.9 percentage points above the national rate of 21.2 percent. This measure captures people neither working nor actively seeking work, including those with health conditions or caring responsibilities. Local workforce planners note that sustained inactivity reduces the pool of available candidates for the 560,000 employee jobs tracked in the latest profile.
Pay trends and job composition
Real pay growth turned modestly positive, with average regular earnings rising 4.8 percent between May and July 2025, driven mainly by public-sector and service-sector gains. Of the 560,000 employee positions, 70.2 percent are full-time and 29.6 percent part-time, a split that has remained stable in recent quarters. Firms cite the combination of higher wages and persistent vacancies as a constraint on expansion plans.
Businesses seeking to widen recruitment are examining flexible scheduling and training programmes already operating in the city centre and surrounding districts. No new large-scale interventions have been announced for the second half of 2026, leaving employers to adapt existing schemes to local conditions.
This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.