Dorset LEP Issues latest economic and local labour market insights

Recent economic insights released by Dorset Local Enterprise Partnership (LEP), the private/ public sector partnership responsible for driving economic growth in the region, has revealed a very mixed economic landscape and job market with an unexpectant but slow growth coupled with increasing labour inactivity providing new challenges for an already tight recruitment climate.  

Dorset LEP’s January Economic Update and 2022 Labour Market Insight Report, available to access now, are important reads for anyone with an interest in the Dorset economy, skills providers, business management, planning and recruitment.   

The January 2023 edition of the monthly Dorset Economic Update highlights key economic developments over the year both nationally and locally, reporting on the latest data from the ONS, Consumer Price Index, NatWest South West Purchasing Managers Index (PMI), World Bank, the regional Manufacturing Barometer from SWMAS, and the 2021 Census. The update highlights: 

• an unexpectant but slow growth in the UK economy in November, with the Consumer Price Index down to 9.3% from 9.6% in October  

• a slight increase in purchasing confidence amongst South West businesses with evidence suggesting plans for investment and hopes for a revival in demand 

• an increase in manufacturing orders as a result of production being brought back into the UK 

• signs of easing to the energy cost crisis 

• c15% of the population across Dorset LEP area holding no formal qualifications and just under one-third hold Level 4 qualifications or above 

• c50% of households experiencing at least one ‘dimension’ of deprivation – education, employment, health, housing 

The 2022 Dorset Labour Market Insight report looks back at the local job market highlighting recruitment figures, vacancy trends, occupational activity, skills demands and salary information revealing: 

• strong overall recruitment exceeding previous years, with the highest aggregate vacancies advertised on record 

• continued signs that businesses were struggling to fill their vacancies, particularly in the health care sector  

• a continuous increase in economic inactivity (those opting out of employment) 

• a prevalent decline in apprenticeship vacancies being advertised compared to the previous year, particularly in the BCP area 

• stagnant wages - with offered salaries at best increasing marginally, or at worst remaining flat. However, other evidence suggests that existing employees have seen wages increase – at least in nominal (and not real) terms. 

Both papers highlight the impact of the cost of living crisis caused by high inflation and the erosion of household incomes and purchasing power as well as a decline in real wages.   

The insights are released during a conflicting national economic backdrop featuring large-scale industrial action, pessimistic economic forecasts, on top of new opportunities for growth announced by the Chancellor, elements of which are analysed in the reports. 

Vinita Nawathe, Director Dorset LEP said: “Maintaining a finger on the pulse of the Dorset economy enhances our focus and ensures effective analytics and performance monitoring of our economic and business growth initiatives. This latest information highlights a growing economy, albeit slowly, but it does look like certain sectors such as the local manufacturing and hospitality sectors are starting to bounce back.  The issue of a growing number of the population opting out of the workforce will need to be addressed if we want to improve our local productivity and resolve recruitment challenges, particularly in the healthcare sector which given our demographic profile is of immense importance to the county.  Overall the insights reflect a complex local economic landscape which is also reflected nationally and makes the work of our partnership more pressing to improve both productivity and prosperity in Dorset.”  

Both reports are available to access via the Dorset LEP website –  

https://www.dorsetlep.co.uk/labour-market-and-skills-research?nid=53d67cdb-7637-490f-bbf2-5fb6d21e5d4e 

https://www.dorsetlep.co.uk/economic-updates