Welsh labour market shows mixed signals as employment dips and inactivity rises

CDI News Desk

02 November 2025

Welsh labour market shows mixed signals as employment dips and inactivity rises

The Welsh Government’s October 2025 Labour Market Overview presents a nuanced picture for careers advisers supporting clients in transition. While the employment rate in Wales rose by 1.0 percentage point year-on-year to 71.2%, it fell by 1.5 points on the quarter, suggesting short-term volatility despite longer-term gains.

Unemployment in Wales stands at 4.9%, unchanged from last year but up 0.5 points on the quarter, slightly above the UK average of 4.8%. Meanwhile, economic inactivity has increased to 25.0%, up 1.1 points quarterly, though down 1.0 point annually. This rate remains notably higher than the UK average of 21%.

Payrolled employee data from HMRC shows a monthly decrease of 1,200 workers in Wales, bringing the total to 1.31 million. This follows a steady rise since 2021, now showing signs of plateauing.

These figures underscore the importance of targeted support for economically inactive groups and those facing short-term employment disruption. The data also reinforces the need to promote skills relevance and adaptability, particularly in sectors experiencing volatility.

Read the full labour market overview.

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