Financial services sector bullish despite slipping behind Manchester
Birmingham’s financial services community remains bullish about its growth despite a new report showing it had fallen behind Manchester in terms of the number of people employed in the sector.
The report from TheCityUK emphasised the strength of financial and related professional services (FRPS) outside London, with two-thirds of the 2.3m industry jobs based outside the capital city.
TheCityUK’s analysis of FRPS jobs across the country used the latest official data, although that relates to 2016 and compares major cities rather than local authority areas, which results in the data for Manchester being different than sometimes used elsewhere.
While Manchester added 6,400 jobs in a year to reach 51,945 jobs, Birmingham’s figure reduced by about 300 to 49,475. Edinburgh remains in second, with 52,885, although all regional cities are dwarfed by London’s 792,000 jobs in the sector.
Despite Manchester’s sector employing more people, Birmingham remains ahead on the key metric of economic impact, as measured by gross value added (GVA) figure – Birmingham’s £3.04bn well ahead of Manchester’s £2.67bn.
Sandra Wallace, DLA Piper
“Instead we need to work together as a sector across the UK to promote the importance of our sector, support local growth in our communities and work with public authorities to ensure we have an infrastructure to thrive.”
TheCityUK, which makes 15 recommendations in its report to support the sector, has called for “greater emphasis on local expertise and local decision making” rather than adopting a one-size-fits-all approach.
“There is a growing belief that we are also working hard to make a success of our devolved powers, and should use these to drive economic growth across the West Midlands,” added Wallace.
Long-term investments by HSBC UK and PwC at the neighbouring Arena Central and Paradise developments, where they will be joined by HMRC’s regional hub, are visible signs of the sector’s growth in the city centre.
Nicola Hewitt, commercial director at the West Midlands Growth Company, believes the performance of the FRPS sector – which employs 137,000 people across the wider region – “underlines the confidence” felt more generally.
She is also looking forward to more good news when the data catches up with what is happening in the sector.
“This ONS data from 2016 precedes the arrivals of HSBC to Arena Central and PwC to Paradise, and so we can expect even more positive figures in the future,” she said.
“The region is increasingly seen as a BPFS [business, professional and financial services] hub. Investments such as these will not only bring jobs to Greater Birmingham directly, but will also create a ripple effect by making the area even more attractive for companies of all sizes looking to relocate here.”
Business that have been in Birmingham for many years are also looking to grow on the back of the renewed momentum in the city.
Amit Thaker heads EY’s financial services team in the Midlands, and is leading on plans to triple the division’s headcount by 2020. The strategy is backed by the firm’s own research that forecasts the growth of the financial services sector in the Midlands will outpace the economy in the next couple of years.
Amit Thaker, EY
“The growing number of FS organisations that have either established or have grown existing operations in the region over the last two years is testament to that.”
Thaker believes Birmingham’s performance is part of a wider trend that is reflected in other regions.
He added: “The overarching trend we are seeing is the continuing growth of financial services organisations and operations outside of London – Birmingham and Manchester are both benefitting from this trend, as are other regional financial centres such as Edinburgh, Newcastle and Bristol.
“It’s a really clear sign of confidence in terms of the long term commercial opportunities, infrastructure and talent pools that exist in these parts of the UK.”
