West Midlands records biggest growth in employment of all UK regions
The West Midlands recorded the biggest growth in employment of all UK regions with the creation of 81,000 jobs in the year to November 2019.
Over the last three years (2016 – 2019), the West Midlands has seen an average economic growth of 2.1% Gross Value Added (GVA) growth – surpassed only by London and the East of England. However, looking ahead the region’s growth is expected to drop to 1.4% GVA until 2023 which will see it outpaced by other regions including the East Midlands (1.6%).
According to EY’s Regional Economic Forecast, manufacturing will continue to bolster the regional economy in the West Midlands as the sector continues to contribute the most GVA up until 2023. However, the region’s manufacturing sector’s GVA growth is expected to more than half from 1.4% (2016 – 2019) to 0.5% (2020-2023) with employment dropping by 2% per annum over the period as technological change causes a decline in manufacturing employment.
Looking ahead to 2023, employment growth of 0.3% for the West Midlands is forecast to underperform the UK rate of 0.7%. The sectors in the region that are expected to see the biggest uplift in employment are Arts, Entertainment & Recreation and Administrative & Support Services Activities.
West Midlands’ cities and towns
Birmingham – in line with the wider West Midlands – will see growth slow initially but is expected to expand by 1.5% per year between 2020 and 2023, slightly ahead of the region. Employment in the city is expected to grow at an average rate of 0.5% per year, underpinned by gains in the Human Health & Social Work and Administrative & Support Services sectors.
Other locations in the West Midlands are expected to see GVA growth of between 1.8% and 1.1% over the next four years: Solihull (1.8%), Coventry (1.5%), Walsall (1.5%), Rugby (1.5%), Redditch (1.3%), Sandwell (1.3%), Stoke-on-Trent (1.3%), Worcester (1.2%), Wolverhampton (1.2%), Telford and Wrekin (1.2%), Lichfield (1.2%) and Dudley (1.1%).
Simon O’Neill, EY’s Midlands managing partner, said: “Over the last decade, devolved powers have helped our region outperform the majority of its peers. Whilst it’s easy to be disappointed by a forecasted drop in GVA growth, largely driven by pressure on manufacturing, it is clear the West Midlands is still thriving and the prospect of Coventry as the UK City of Culture and the Commonwealth Games provides further momentum to build upon.
“Looking forward the region must think about how it can build upon its existing strengths and – although the sectors’ growth is set to slow – manufacturing will remain at the heart of the region as it continues to produce the most economic value. To ensure the region retains its competitive edge on the global stage, it must continue to lead the way on using innovative technology to produce high-value manufacturing.”
