West Midlands economy forecast to be fastest growing UK region outside of London
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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.”