West Midlands economy forecast to be fastest growing UK region outside of London
The West Midlands will continue its reign as the fastest growing UK region outside of London and the South East, with 1.7% Gross Value Added (GVA) growth until 2021.
According to EY’s Regional Economic Forecast, he region’s growth will match the UK average of 1.7% during the same period to 2021.
The West Midlands has seen economic growth of 1.6% GVA in 2018 compared with the UK average of 1.3%.
The region’s export-oriented economy continues to gain a competitive advantage from the weakness of sterling and global economic growth. The West Midlands also recorded the biggest growth in employment of all UK regions in 2018, with 2.2% growth and the creation of 52,000 jobs, the second-fastest employment growth behind London.
Looking ahead to 2021, employment growth of 0.6% for the West Midlands is forecast to continue to exceed the UK rate of 0.5% and is expected to be the third-fastest of all UK regions. Most of the 59,000 additional jobs are anticipated to be in business services and construction sector, however, technological change is likely to lead to a slight decline in manufacturing employment.
EY’s forecast has identified that city growth typically outpaces regional growth, with Birmingham’s GVA growth expected to accelerate to 2.0% over the period 2018-2021. Employment growth in Birmingham is also set to improve to 1.0% per year until 2021 and comes just behind Manchester, which ranked first for forecast employment growth of 1.2%.
Simon O’Neill, managing partner at EY in the Midlands, said: “With the fastest regional GVA growth rate outside of London and the South East, the West Midlands has been a standout performer over recent years. Birmingham’s pace of growth at 2.0% places the city ahead of both the West Midlands and the UK as a whole (both averaging 1.7%).
“Activity levels have improved across a range of sectors with manufacturing growing at 2.8% per year on average and construction at 4.0%. The region also achieved better growth in professional services and IT than the national average, demonstrating broad based improvement across the local economy.”