Yorkshire’s key cities see decline in economic growth, according to new report

Economic growth within Yorkshire’s largest cities declined in the final quarter of 2015, signalling a £1.5bn fall in the expected growth of the region’s economy in 2016, according to a new report.

Irwin Mitchell’s latest UK Powerhouse report, which has been produced with the Centre for Economic and Business Research (Cebr), provides an estimate of GVA and job creation within 38 of the UK’s largest cities 12 months ahead of the Government’s official figures.

The latest study reveals that economy in Leeds grew by 1.7% in the 12 months to Q4 in 2015 compared to 2% in Q3. The value of the goods and services produced, however, reached £20bn for the first time.

Growth within Sheffield’s city economy fell considerably from 1.7% in the 12 months to Q3 to 1.3% in the final three months of the year. Sheffield was also the only city in the study to see the number of people employed fall in the year to Q4.

Hull’s economy grew at the same rate as that of Leeds whilst Bradford’s growth rate fell from 1.6% to 1.2%.

In line with its projections for the UK as a whole, Cebr has lowered its forecasts for GVA in 2016 for Yorkshire as a whole. Three months ago, GVA in the region was expected to reach £106.5bn by the end of this year, but this has been revised downwards by £1bn to £105.5bn.

Over the next 10 years, Irwin Mitchell’s report predicts that Leeds’ GVA will increase by 17.1% with other large cities in the North expected to record similar increases with Liverpool growing by 17.1%, Sheffield at 15.1% and Newcastle recording a 16.4% increase.

The value of the economic gap between London and the northern region currently stands at £62bn and is expected to reach £115bn in 2025 according to the study’s latest analysis.

Paul Firth, regional managing partner of Irwin Mitchell’s Sheffield office, said: “Manufacturing forms an important section of the Sheffield and Yorkshire economy.

“While steel no longer dominates, the well-documented issues within the UK’s steel industry has been one factor weighing on employment across the region, much as it has done in other areas of the UK. In addition to private sector job cuts, Sheffield has also increasingly seen public sector employment come under pressure and further job cuts in the City Council have already been announced.“

The report’s findings follow a series of announcements at the Budget last month which included a £300m pledge by the Chancellor to improve journey times between the northern region’s largest cities.

Mr. Firth added: “Increasing infrastructure investment to reduce journey times and improve connectivity across the north of England are vital if the ‘Northern Powerhouse’ is going to succeed.

“Not only should there be a significant increase in infrastructure spending in the north, the Government must listen to businesses when deciding where its transport hubs should be located. In Sheffield, for example, the Government’s current plan is to locate the HS2 station at Meadowhall even though the financial benefits of it being located in the city centre are shown by all the date to be manifestly far greater.“

Andrew Walker from Irwin Mitchell in Leeds also commented: “As one of the leading financial service centres outside of London, the slowdown in financial and insurance services has begun to dent growth within Leeds in the latest quarter. In the absence of a flourishing financial sector, however, growing employment in areas such as legal and accountancy services, HR and IT is helping to support growth.“