Midlands’ growth set to outstrip most of country Jobs in science, construction and professions to increase
THE West Midlands is expected to have the fastest growing economy of any UK region outside of London and the South East, experts say.
It is set to perform better than other UK regions including the East Midlands, North West and Scotland.
Manufacturing jobs will grow more slowly than expected, but growth in other sectors such as construction and professional services will make up for it.
Chartered accountants EY said economic output in the West Midlands will grow by 1.8 per cent a year.
However, London and the South East will continue to outperform all other UK regions through to 2020 – suggesting the gap between the south and the rest of the county will continue to grow.
And Manchester is expected to be the most successful city, beating Birmingham when it comes to economic growth, even though the North West region as a whole will grow more slowly than the West Midlands region.
Simon O’Neill, managing partner at EY in the Midlands, says: “The West Midlands is forecast to be the fastest growing region of the UK outside of London and the South East leading up to 2020, with growth underpinned by strong performance in the real estate and business services sectors.
“With the pace of manufacturing expected to slow after 2017 and 1,400 fewer jobs forecast in the sector by 2020, strong growth in professional services, scientific/technical and construction are expected to offset declines in manufacturing and public services.
“With Coventry recently announced as City of Culture in 2021, we can expect an economic boost to the city and wider region in the run up to 2021, and then a likely boost in the year itself.”
He said Hull, the previous City of Culture, had enjoyed a boost to its economic output, known as “gross value added” or GVA.
“The experience of Hull in 2017 suggests a boost to GVA of more than £50 million is possible with the potential to create more than 1,500 jobs.
“Even more important will be taking the opportunity to increase awareness of the city to boost tourism and business investment in future years.”
EY’s forecast says there has been little progress on geographical rebalancing of the UK’s economy in the last three years and the economic divide between the North and South of the UK will continue to expand (albeit at a slower rate than previously) leading up to 2020.
Employment in the West Midlands has seen a resurgence according to the study, with 110,000 more jobs recorded in June 2017 compared with the previous year – the largest absolute increase of any UK region.
Looking ahead to 2020, total employment in the West Midlands is expected to increase by 0.3 per cent per year – just behind the UK average of 0.4 per cent.
There’s bad news for the North East , which is forecast to experience the slowest rate of GVA growth between 2017 and 2020, growing at 1.2 per cent per year.
It is also the only region where employment is expected to decline, falling by 0.1 per cent per year between 2017 and 2020, with the largest declines projected in the manufacturing and public administration sectors.