The economic growth of England’s cities and the South is on track to outpace towns, the North and Midlands as the country recovers from the COVID-19 pandemic, according to EY’s latest Regional Economic Forecast. Although the report says that the ‘levelling up’ agenda can accelerate with targeted government and local action, and if lessons are learned from the pandemic’s impact on work-life balances.
When measured by Gross Value Added (GVA), the economies of just five out of nine English regions are forecast to be larger in 2023 than they were in 2019. Three of these regions are in the South: London (0.51% annual growth forecast); the South East (0.39%); and East (0.08%). Annual growth is also expected in the North West (0.11%), while marginal growth (0.01%) is forecast in the East Midlands.
Only the South East and London are forecast to employ more people in 2023 compared to 2019, with the South East expected to see an annual increase of 0.14%
Richard Baker, Managing Partner at EY in the South East, said: “The South East’s key sectors – from professional and financial services through to IT and the public sector – are among those which were least exposed to the pandemic, and the region has a good base for future growth.
“The levelling up agenda is a key issue for the national economy and there is a focus on the North-South divide. However, as a region, the South East must also address its own economic challenges and work towards a joined up regional plan which allows the region to continue to attract investment, provide opportunities for business creation and growth, and which also develops skills and retains employment.”
Paul Britton, CEO of the Thames Valley Chamber of Commerce commented “It is positive to see that the South East is in the position to bounce back quicker when compared with other UK regions. The region continues to stand strong in the face of unprecedented business conditions. It’s evidence too, that the Thames Valley is the UK’s true ‘turbo-region’ with an array of significant resilient sectors, including life sciences, technology and clean tech, which will be one of the key areas of focus and opportunity for the UK’s zero carbon aspirations.
“However, we must not remain complacent and must continue to support business to grow. Sectors such as the Arts, Leisure and Tourism and Hospitality have been particularly hard hit and with evidence pointing towards cities recovering faster than towns, we must continue to support business to improve the agility, digitalisation and global reach of their operating model.”
Of the region’s main locations outside of London, GVA in Guildford (1.18% per year), Windsor & Maidenhead (0.68%) and Reading (0.58%) is expected to rise ahead of London (0.51%) between 2019-2023. GVA in the Thames Valley region (0.60%) is also set to exceed that of London in the same period, thanks to the attractiveness of the location as a hub for technology-based businesses and growth in the real estate, health, retail and professional services sectors.
The South East is the only non-London region where there is also expected to be an increase in employment by 2023 (0.14%). Some of the biggest increases are forecast to be in Guildford (0.66% per year), followed by Windsor & Maidenhead (0.35%) and Oxford (0.30%). Employment in the Thames Valley region (0.31%) is also forecast to grow above the South East average per year by 2023.
Read the full report here