Communications sector set to power East Mids economy

The East Midlands’ information and communication sector is forecast to be one the UK’s fastest growing regional sectors between 2024-26, according to EY’s latest Regional Economic Forecast.

When measured by Gross Value Added (GVA), the sector is set to grow by an average 4.4% each year between 2024-26 in the East Midlands – faster than any other sector in any other region.

However, as a region the East Midlands is forecast to grow at the second lowest rate over the same period, with average annual GVA growth of 1.9%, compared to the UK average of 2.1%. Leicester and Nottingham are expected to lead the region with annual average GVA growth of 1.9% between 2024-26, while Derby, Boston and Mansfield are not much further behind at 1.7%.

The region’s GVA is expected to contract 1% this year, compared to a 0.6% contraction for the whole of the UK.

Looking ahead, East Midlands employment growth is expected to be affected by job losses in the region’s manufacturing sector partly offsetting gains in the retail and health sectors. As a result, average annual employment growth in the East Midlands (1.2%) is forecast to be marginally behind the UK average (1.3%) over 2024-26 – although the region is set to just outperform the West Midlands’ 1.1% annual average growth over the same period.

Region 2023 GVA Growth Region Annualised GVA Growth 2024-26
London -0.2% London 2.6%
Scotland -0.6% South East 2.2%
UK -0.6% UK 2.1%
East -0.7% South West 2.1%
Northern Ireland -0.7% East 2.1%
South East -0.7% West Midlands 2.1%
North West -0.7% North West 2.0%
Wales -0.8% Northern Ireland 1.9%
South West -0.8% East Midlands 1.9%
North East -0.8% Wales 1.7%
West Midlands -0.8% Yorkshire & the Humber 1.7%
Yorkshire & the Humber -1.0% North East 1.7%
East Midlands -1.0% Scotland 1.7%

Simon O’Neill, managing partner at EY in the Midlands, said: “Sectors continue to play a key role in forecast performance at a city and town level. While the pandemic put pressures on city centres or supply chain-dependent manufacturing areas, the rising cost of living is likely to have the biggest impact in places that are dependent on the local High Streets or public sector jobs, sue to the squeeze on consumer spending and wages.

“According to the report, the East Midlands is over indexed to the UK’s slowest growing sectors – and currently the least exposed to the five fastest growing. This is why the forecast performance of the region’s information and communications sector is so important. It’s the type of high value sector which can boost growth across the region and add resilience to the economy.

“However, high value sectors won’t function without a high value workforce and the East Midlands needs a clear strategy for retaining and uplifting its skill base. This needs to be approached from several angles: graduate and skills retention relies not just on the development of well-paid jobs, but strategic planning on the broader set of social, environmental and structural components that determine the quality of life in a given region too.”

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