Region‘ may lose8 years of growth’

Yorkshire forecast to shed 12pc of GVA

ECONOMY: Yorkshire and the Humber could lose up to eight years’ worth of growth due to the financial hit created by the Covid- 19 pandemic, according to new research.

The region is forecast to lose 12 per cent of gross value added ( GVA) – a measure of goods and services produced less the costs of production – in 2020.

YORKSHIRE and the Humber could lose up to eight years worth of growth due to the financial hit created by the Covid- 19 pandemic, according to new research.

The region has been forecast to lose 12 per cent of gross value added ( GVA) – a measure of goods and services produced less the costs of production – in 2020.

Analysis of Yorkshire and the Humber’s gross domestic product ( GDP) statistics from previous years by small business lender Iwoca suggests that this fall would erase the region’s economic growth made between 2010 and 2018.

London by comparison is estimated to lose four years of growth due to the pandemic’s impact on the economy.

Businesses in Yorkshire and the Humber could also be more vulnerable to the adverse effects of the Covid- 19 crisis, Iwoca said.

The Office for National Statistics identified the two sectors of “accommodation and food services” and “arts, entertainment, recreation and other services’” as being the two worst affected by the pandemic between January and July, and these are sectors likely to be greatly impacted by further local lockdowns.

Iwoca research found that 13.5 per cent of all businesses in Yorkshire and the Humber fall within these sectors – the second highest proportion out of all the English regions – suggesting that the region’s business community may be one of the hardest hit in the country.

According to the most recent data from HMRC, these sectors have seen the highest proportion of jobs furloughed. In the arts, entertainment and recreation sector, 45 per cent of employees were on the furlough scheme at the end of July, and 43 per cent of workers in accommodation and food services were furloughed.

This higher vulnerability could compound the economic effects of additional restrictions which the Government has outlined for towns and cities in the region.

Iwoca, which has an office in Leeds, has pledged to lend £ 220m to small businesses in the North by the end of 2023 to help them recover from the Covid- 19 crisis. Over the past two years it has funded nearly 3,000 small business customers in the North.

Iwoca chief executive Christoph Rieche said: “Small businesses around the country have been hit hard by the pandemic, but it’s clear that some parts of the country – including Yorkshire and the Humber – are particularly suffering.

“We want to support business owners in these hard- hit areas to give them the best chance of recovery over the next few years.

“With this financial commitment, we hope that we can drive up growth and help businesses in Yorkshire and the Humber thrive.”

Garry Barker, managing director of York- based property development and construction company Dream Developments, said: “We develop commercial premises for local businesses. We had expansion plans to develop further estates, but these were shelved due to the lack of mainstream funding.

“To survive, we’ve had to adapt and seek alternative accommodation options for our clients.

“We hit on the idea of diversifying into storage containers instead of buildings to address a local shortfall in availability.

“This is flexible, cheaper and quicker to provide. The first phase should be up and running by December.”