North East set for lowest growth of any UK region
The North East is expected to achieve the lowest growth in the country between now and 2021, new data suggests.
The prediction is part of professional services giant EY’s UK Regional Economic Forecast, which found that growth in the region will follow a positive trajectory but continue to trail behind the rest of the UK.
The North East’s GVA (gross value added) grew 0.8% between 2015 and 2018, and is expected to rise 1.1% in the next three years.
But the figure puts the region firmly behind other parts of the UK, including neighbouring regions in the North. Yorkshire & Humber and the North West, by comparison, are both forecast to see GVA growth of 1.5% per year to 2021. The UK average is expected to be 1.7%.
EY’s report has forecast Sunderland and Teesside to see GVA growth of 1.1% and 1.2% respectively. While below average for urban areas, both figures are nevertheless an improvement on 2015-18, when Sunderland’s GVA grew 0.9% and Teesside’s by 0.3%.
Newcastle is the only North East city to see its GVA growth projection dip from 2% in 2015-18 to 1.4% in 2018-21.
The region as a whole is projected to see employment growth cool in the next three years, from 0.2% in 2015-18 to 0.1% in 2018-2021. This means it will add 4,800 positions to its jobs market – the lowest of any UK region.
Sandra Thompson, North East senior partner at EY, said: “That the North East finds itself below average in these growth tables should be no surprise. Across this region, business leaders know that there is a job to do to drive better growth and create more, higher value jobs here.
“The diversification of our economy is a big part of the solution and will make our economy more resilient.”
She continued: “There are many examples of the efforts being made to do this – from the development of the £350m Newcastle Helix, which is to also be home to the £50m National Innovation Centre, to the many tech start-up and entrepreneurial businesses being encouraged to set up and invest in the region.
“To drive The North East up that league table there is also a need to reskill our labour market and focus on the huge opportunity presented by digital and technology. Take Reading; its dominant information and communications sector comprises almost a quarter of its total GVA, and is forecast to expand by 3.5% annually over the next three years.”
Ms Thompson added: “The national figures clearly show that one of the big priority areas for policy-makers should be an investment in skills.”