Manufacturing powerhouses help lead West Midlands’ economic recovery – RBS
THE economy in the West Midlands grew by an estimated 0.8% in the first quarter of 2014, in line with the rest of the UK, a new growth study has concluded.
The RBS Regional Growth Tracker said that across the region Warwickshire was the best performing county, entering the top 10 areas nationally. Staffordshire entered the top 20 of fastest growing areas.
The bank estimates that the West Midlands economy grew by 0.8% in Q1 2014, up from 0.6% in Q4 2014.
The growth estimate is calculated by taking the UK growth rate of each sector and weighting them by the sector shape of the West Midlands economy. Manufacturing outpaced the UK average (1.3% vs 0.8%) and is relatively prominent in the West Midlands economy (14% vs 11%).
Growth is also accelerating in year-on-year terms: up to 2.8% in Q1 2014 from 2.0% in Q4 2013.
The survey concludes that manufacturing firms are the key to the region’s success – not surprising given it is home to powerhouses such as Jaguar Land Rover and JCB.
Sebastian Burnside, senior economist at RBS said: “The West Midlands economy felt the benefit of the broader UK recovery at the start of the year. Growth of 0.8% in the first three months of the year might not sound like much, but means the region is now producing 2.8% more output than this time last year.”
He said that central to the West Midlands performance in the first three months of the year had been the success of its manufacturing sector, which accounts for 14% of the region’s output.
“Figures like this mean it’s more important here than for the UK as a whole, in fact manufacturing was amongst the best performing big sectors at the start of the year, as it expanded by 1.3%. Other sectors grew strongly too, professional services and retail both had a good start to the year,” added Burnside.
He said while the region as a whole was growing at the same rate as the rest of the UK, there were some stand-out results.
“Warwickshire is in the top 10 fastest growing local areas in the country and Staffordshire also makes the top 20,” he added.
Looking ahead, he said he was optimistic that the West Midlands export success story could continue to strengthen.
“Goods exports to non-EU countries grew by a spectacular 25% last year and a recovering Eurozone should mean improvement in markets that are rather closer to home. Another year of strong export growth would be great news, not only for the region’s manufacturers, but also for the 8% of the workforce who are currently looking for a job,” concluded Burnside.
The average growth of the economy (quarter-on-quarter) for the UK as a whole was 0.8%. The top performing region was the East Midlands, with the slowest growth rate being experienced in the North West.