Yorkshire and Humber economic growth set to outperform UK in 2016
The Yorkshire and Humber region is set to outperform the UK as a whole in terms of economic growth this year, with expected GVA (gross value added) growth of 2.5% in 2016, according to the UK Region and City economic forecast released by EY.
This compares better than the predicted UK average growth of 2% GVA in 2016.
A number of sectors have contributed to growth this year in the Yorkshire and Humber region. Professional and administrative services, logistics, construction and real estate, financial services and manufacturing have all grown faster than the UK average outside of London.
The region, however, continues to fall behind London and the South East, which are set to be the fastest growing regions with 3.2% and 2.9% growth respectively this year.
Looking ahead, all regions are expected to face a challenging few years, with reductions in growth rates expected across the UK. The Yorkshire and Humber region is expected to achieve 1.3% growth between 2016 and 2019, slightly below the national average of 1.5%.
Stuart Watson, Yorkshire and Humber senior partner at EY, commented: “Although this report highlights growth in the Yorkshire and Humber region, it also highlights the limited progress made on economic rebalancing and, in a slower growing economy, closing the gap between North and South will become even harder.
“Devolution is a clear step in the right direction but enabling the regions alone will not be enough. National policy must be designed to complement regional policy through targeted initiatives to support trade, deliver infrastructure, invest in skills and support growth in key sectors.”
Mark Gregory, chief economist at EY, added: “The Yorkshire and Humber region is doing relatively well in terms of its current and expected economic performance over the next three years, but our forecast shows that none of the UK’s region’s or cities will be immune to slower economic growth as the UK economy faces a number of challenges in the short to medium-term.
“Uncertainty surrounding Brexit is only one of a number of factors that are at play. The combination of low inflation and rising employment and average earnings that made 2015 a bumper year for consumer spending is also fading fast.
“Next year is set to be much tougher for consumers, with higher inflation, subdued average earnings growth and welfare reforms such as the cap on benefit cap entitlements, leading to slower income growth.”
Employment levels in Yorkshire & Humber are expected to have increased by 1.7% by the end of 2016, surpassing the UK average of 1.1%. Leeds is the leading city for employment growth in the region, with 25% of growth, equating to 12,000 new jobs, expected to be created this year.
Looking ahead to the 2016-19 period, GVA growth in Leeds is expected to average 1.7% annually, outpacing both the Yorkshire and Humber region (1.3%) and the UK average (1.5%).
Leeds is expected to achieve jobs growth of 0.3% per year between 2016 and 2019, bucking the disappointing wider regional forecast of falling employment. Losses from public administration and manufacturing are likely to be offset, in employment terms, by strong outturns in the professional services and administration and support sectors.
Looking to promote your product or service? Bdaily Marketing can help you reach a regional business audience. Request our latest Media Pack →