East Midlands Economic Growth Report: Leicester – the feel good factor

East Midlands Economic Growth Report: Leicester – the feel good factor

TheBusinessDesk.com and Barclays have produced an exclusive report and survey on the state of the East Midlands economy, assessing the challenges and opportunities facing the area as it continues to outperform its regional rivals. Read the full report here.

Here, Ian Borley, East Midlands senior partner at KPMG, celebrates the entire region – and picks out Leicester as the city really going places.

WE SHOULD be celebrating the fact that the East Midlands economy is powering ahead in comparison to other regions in the UK, and the supporting evidence is compelling.
Employment figures continue to rise while other regions suffer, and business start-up rates are looking skyward. In short: it all feels very healthy to me, and the reasons for this are myriad.

No one sector dominates in the East Midlands as the region has a very diverse economy with a good variety of companies, including food and drink, manufacturing, retail and property development. We’ve got a countercyclical economy; so when one sector is doing badly, another one – or more – tend to be doing well.

Furthermore, the programmes to improve the skills gap are without doubt in a much better place than they were just a few short years ago. This is largely due to the world class universities that we have in the region who each produce different graduates. My clients would probably tell you that the skills gap still remains, but they’d also tell you that it’s getting smaller.

Lastly: location. The East Midlands’ central location means it can attract the best people from across the UK.

Of all the East Midlands cities, there is no doubt that Leicester has the feel-good factor at the moment, mainly because of Leicester City’s exploits and because of the Richard III find. There’s a palpable sense of civic pride about the city that simply hasn’t been seen in recent years. This has been mirrored in some major inward investment stories with the likes of Hastings, Mattioli Woods and IBM investing in the city centre.

Of course, challenges remain. The Brexit vote was a shock for many business owners, but I don’t think we’ve had enough time to judge whether it has hit business confidence just yet. For manufacturers across the East Midlands who are exporting a weaker pound, it is good news, and there is no danger of the EU walking away from the UK in the short term. It is, as they say, still early days.

A counterbalance to the potential challenges of Brexit are the opportunities presented by the Midlands Engine project. From the outset there were concerns in the East Midlands that the Midlands Engine would be too Birmingham-centric if the East Midlands didn’t get its act together. However, Birmingham should be seen as an asset for the whole of the Midlands and not as a threat that will drag investment away from our towns and cities.

The D2N2 LEP has published a wish-list of what it would like from the Midlands Engine – although we’re yet to see that from the Leicester and Leicestershire LEP. There is a vital balance to be had between promoting the Midlands as a whole and holding out for our own more localised economies.

Overall, I’m cautiously optimistic about the future. At the beginning of the year everything seemed to be pointing in the right direction, and then we all know what happened next… however, no-one really knows what the full effect of the government invoking Article 50 will be.

I believe the East Midlands economy is in a better place than it was in 2008, before the recession. The banks have balanced their books and money is cheap – and available – for investment and M&A activity. The future might be unclear, but we’re heading in the right direction.

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