The small rise in unemployment in the South West announced this week demonstrates how fragile economic growth is in the region, Business West has warned.
The region’s largest business organisation – which runs Bristol Chamber of Commerce and the Bristol Initiative – said “fundamental weaknesses” remained to be tackled, particularly the “dangerously high” level of youth unemployment.
Official figures show unemployment in the South West rose by 5,000 in the three months to the end of June to 4.4% – a 0.1 % increase on the previous the quarter but down 0.8% compared to this time last year. 
On a national basis, the figures from the Office for National Statistics (ONS) show UK unemployment increased by 25,000 and stands at 5.6%.
Youth unemployment rate increased slightly to 16.0%. While this is down from 16.9% this time last year it remains way above average unemployment and pre-recession levels.
Business West managing director Phil Smith said: “The news coming out of the labour market has put a dampener on encouraging growth figures. Two weeks ago we saw a spring surge in GDP growth that fuelled calls for earlier interest rate rises among a few but a slight rise in unemployment reminds us that growth remains fragile.
“For quite some time, unemployment has been on a downward trend but this week we see increases both locally and nationally. While it may be too early to conclude that the jobs market is levelling off, this quarter’s stall has at least raised the question.”
He described the slight increase in youth unemployment as “alarming”, saying it remained way above average unemployment and pre-recession levels and showed that more needed to be done to bridge the gap between education and business.
“It isn’t all bad news as the picture has improved notably since this time last year,” he said. “But this data is a timely reminder that it isn’t all plain sailing. Across the board there are still fundamental weaknesses to be tackled before long-term growth can be secured, such as the dangerously high youth unemployment that we can see in the figures.”
Meanwhile the CBI said the rise in unemployment was disappointing and warned that the Government’s new National Living Wage announced in the recent Summer Budget could impact on job creation.
Director-general John Cridland said: “With the new National Living Wage forcing pay rises from early next year, the Government will need to keep a close eye on employment figures to ensure it minimises the negative effect of locking some people out of work.”
