Research finds Newcastle’s economy is set for growth into 2023

Newcastle’s economy will return to growth in the second half of 2023 but at a slower rate than Sunderland and other cities in the north, according to a new study by law firm Irwin Mitchell.

The Irwin Mitchell City Tracker has been produced by the Centre for Economics and Business Research (Cebr) and examines 50 locations across the UK, forecasting future growth in terms of GVA (Gross value added) and employment.

The report, which estimates that the UK entered into a recession in the second half of 2022, expects economic growth to resume in the second half of 2023. According to the research, Newcastle’s economy is predicted to be 0.3 per cent larger in Q4 2023 than it was in the final quarter of 2022. It is expected to perform relatively poorly in terms of employment levels, recording just 0.9 per cent growth.

The size of Sunderland’s economy is expected to grow by 0.5 per cent in the 12 months to Q4 2023 and see a 1.3 per cent increase in employment levels in Q4 2023. This is expected to follow a relatively strong performance for job creation at the end of 2022 where 2.1 per cent growth placed it third - just behind Liverpool and Cambridge.

Josie Dent, managing economist at Cebr, said: “2023 will be a difficult year for consumers and businesses across the North East, with the cost-of-living crisis expected to lead to falling economic activity. However, Cebr forecasts that economic growth will resume in the second half of 2023, with most cities expected to see an annual expansion in GVA by Q4 2023.”

Charlotte Rees-John, partner and head of Irwin Mitchell’s consumer sector, said: “Last year presented numerous challenges and the downward pressure on spending activity, which continues to be concentrated in the consumer sector, looks set to continue throughout the first half of 2023.

“The consumer sector has however been one of the most resilient, agile and innovative sectors in recent times and those businesses that succeed during 2023 will be in a very strong position to take advantage of a more stable economic environment in 2024.”

She added: “Considering longer-term aspirations, such as the transition to carbon net zero, is something all businesses, irrespective of the sector they are in and the pressures that they are facing, need to do.

“ESG is fast becoming a priority for the majority, particularly at a time when there is huge pressure and scrutiny from consumers and investors who are increasingly making their decisions based on ethical as well as financial factors.”

By Mark Adair – Correspondent, Bdaily