Welsh labour market sees mixed signals in June according to ‘development stats’
Welsh labour market sees mixed signals in June according to ‘development stats’
The latest labour market statistics from the Welsh Government and the Office for National Statistics (ONS) reveal a mixed outlook for the Welsh economy, as employment indicators offer cautious optimism amid ongoing economic headwinds, according to so-called ‘statistics in development’.
The Welsh Government say: “these figures are particularly volatile for Wales and provide an uncertain view of the labour market when viewed in isolation.
“The current headline labour market statistics, which look at rates of employment, unemployment and economic inactivity, are classified by ONS themselves as ‘official statistics in development.’
“The ONS also confirms that they are facing challenges in maintaining response rates to the LFS, affecting the reliability of its data.”
The best way of understanding the performance of the Welsh labour market is to consider longer term trends across a basket of indicators including other data sources such as the Annual Population Survey, HMRC real time information on paid employees, data on workforce jobs, and the claimant count.
Employment and earnings
Decline in payrolled employment: HMRC’s Real Time Information data shows that the number of paid employees in Wales fell by approximately 5,300 (‑0.4%) in May 2025, to 1.31 million. This mirrors UK-wide trends, where paid employee numbers also declined by 0.4% month-on-month.
Rising employment rate: According to the Labour Force Survey (LFS), the employment rate in Wales for the three months to April stands at 72.2%, up 2.3 percentage points on the quarter and 3.2 points year-on-year. This compares to a UK figure of 75.1%.
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Unemployment and inactivity
Unemployment edging down: Wales’ unemployment rate declined to 4.7%, down 0.7 points on the previous quarter but up 1.2 points from last year. The UK unemployment rate stands slightly lower at 4.6%.
Economic inactivity improves: The economic inactivity rate dropped to 24.2%, down 1.8 points over the quarter and 4.2 points year-on-year. However, it remains notably above the UK rate of 21.3%.
While the recent dip in payroll numbers hints at short-term softness in the labour market, the broader LFS figures indicate stronger underlying trends. The bump in the employment rate and decrease in inactivity are positive signs, particularly as Welsh businesses and public services manage recruitment and retention amid post‑pandemic adjustments.
Caveats and context
The ONS flag that most quarterly and annual changes—outside the economic inactivity rate—aren’t statistically significant, suggesting these trends could reflect sampling variation . They also stress the importance of interpreting LFS data alongside additional indicators such as workforce jobs and claimant counts.
The public body has also urged caution when reading too much into the data, saying: “LFS-based labour market statistics will continue to be labelled as official statistics in development (Office for Statistics Regulation) until further review and we continue to recommend caution when interpreting this data.
“We would recommend using the LFS data alongside the trends in other measures of the labour market, particularly Workforce Jobs (a quarterly measure of jobs), claimant count (the number of people claiming unemployment related benefits) and the RTI data from HMRC (the number of employees on payroll) to gain a clearer picture of the Welsh labour market.”
