Consumer spending for NW revised up in report

GDP growth across the North West is projected to be around 1.4% in 2018, according the PwC’s latest UK Economic Outlook report.

The figure has been revised up slightly from the 1.2% predicted in last year’s report with 2019 predicted to see similar levels of growth – in line with UK average predictions.

Nationally, real consumer spending growth is expected to slow from around 1.8% in 2017 to around 1.1%.

Subsequently consumer spending is projected to edge up to 1.3% in 2019, but has the potential to return to around 2% trend growth on average in the 2020s assuming a reasonably favourable Brexit outcome and productivity gains from automation.

In terms of employment growth the North West saw growth rates of 0.5% (UK average) which compared favorably with London (0.8%). The North East witnessed the largest rise in employment growth rate over the past year of 1.7% which was in contrast to Yorkshire & Humber which saw a negative jobs growth of -0.2% – See figure 2.

In the housing market the North West witnessed above average growth of 5.9% with London seeing the weakest growth of any region (2.5%) in the year to December 2017 reversing the relatively strong growth in London house prices seen in previous periods. Scotland saw the highest level of growth at 7.7% – See figure 3.

John Hawksworth, chief economist at PwC, said: “Consumer spending accounts for more than two thirds of UK GDP, making it the most important driver of UK economic growth.

“But it has slowed significantly recently as higher inflation has squeezed consumer spending power and it looks set to remain sluggish in the short term, dampening overall GDP growth.

“Looking to the 2020s, however, growth could return to its long term trend rate of around 2% if the UK can negotiate a favourable future deal with the EU and automation boosts domestic productivity growth and hold down prices.”

 

Close