Service sector drives strong growth
THE North West economy finished 2014 on a high and after London was the best performing UK region, according to a report.
The RBS Regional Growth Tracker said a strong performance from the service sector – which includes financial, professional and administrative services as well as retail and wholesale – drove the strong performance in 2014 as the region grew 0.4% in the fourth quarter and 3.1% year-on year.
Rupert Seggins an economist at RBS and the main author of the report said: “An entrepreneurial spirit is alive and well in the North West, with the region now home to a thriving media, IT and computing industry with a number of cloud computing and IT service companies setting up in the region.
“However, the near halving of the unemployment rate in Cheshire to around 3.5% in the year to Q3
2014 has perhaps been the most impressive story of all.”
The three star performers in terms of economic growth in the region were East Merseyside, Cheshire East and West Cumbria, which grew by around 3.9%. Sefton, Blackpool and Wirral were the weakest performers, with RBS estimating growth of around 0.3% in Sefton.
Nationally, London was the best performing region with growth of 3.7% on the year. Yorkshire & The Humber and the West Midlands both grew 2.5% during the year, RBS’ economists said.
Steve Lewis, North West regional director at RBS said: “The North West’s economic diversity gives
it a certain level of resilience. We enjoyed a strong year-end which looks set to continue into 2015 with investor confidence still buoyant judging by the increase in private equity and M&A activity.
“The launch of new debt funds, sometimes up to £100m, is further evidence of this positivity. We’re also seeing something of a renaissance in the property and commercial real estate sector with a number of new
builds on the horizon.
“Obviously, a big issue for Manchester is just how far the debate over the devolution of power from Westminster will go. The North West is well placed to benefit given its strong local authorities and expanding infrastructure.”
The Regional Growth Tracker is calculated by taking the UK growth rate of each sector and weighting them by the sector shape of each region’s economy. An adjustment is then made regarding each region’s historic competitiveness.
