How manufacturing revival will help Yorkshire's economy bounce back next year

YORKSHIRE’s economic productivity is set to contract by nine per cent this year due to the impact of the coronavirus pandemic, before bouncing back in 2021 as demand for manufactured goods returns, according to a new study.
The report expects regional GVA to improve next year.The report expects regional GVA to improve next year.
The report expects regional GVA to improve next year.

The data analysed by commercial property specialists, Instant Offices, suggests that sectors which have been least affected by the lockdown, such as health and social care, are most likely to record a speedy recovery. The survey predicts a slow recovery starting from July following a relaxation in lockdown measures.

The study concludes that the UK’s regional economic productivity or GVA (Gross Value Added) is set to dip significantly in 2020 due to Covid-19.

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In Yorkshire, the survey predicts the contraction rate for this year will be -9 per cent. However, the survey found that the prospects for growth next year are much brighter.

John Williams, the head of marketing at The Instant Group, said: “When it comes to regional GVA forecasts, economists predict Yorkshire and the Humber will see a 9 per cent contraction in 2020 due to Covid-19.

“In 2021, the economy is predicted to see 9.9 per cent growth as consumer spending increases and demand for manufactured goods returns.

“Predictions show the scale of recovery could mirror the scale of contraction in each region due to sectoral make-up. Therefore, with Yorkshire’s manufacturing sector being hard hit, this area could drive growth as demand starts to return next year.

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“Economic losses during the Covid-19 lockdown are largely due to Yorkshire’s large manufacturing sector, which contributes to 14.3 per cent of the local economy. The impact has been seen in every level of the supply chain.

“Also, while a large portion of the workforce has been able to work remotely in London, Yorkshire’s professional service sector is less prominent, which has led to further losses.”

Areas of Yorkshire’s economy that will be hit the hardest include manufacturing which is expected to suffer a 73 per cent loss to GVA, according to Mr Williams.

Wholesale and retail is set to suffer a 61 per cent loss to GVA while real estate is predicted to be hit by a 24 per cent decline.

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Based on the sectoral make-up of each region, the analysis concludes London’s GVA is set to be the least affected due to its extensive service-based economy and remote workforce, with a reduction of 7.3 per cent in 2020. However, in 2021, London will only see an increase of 8 per cent in GVA.

In contrast, the West Midlands is forecast to see its GVA reduce by 10.1 per cent this year. However, in 2021 this is likely to increase by 11.3 per cent due to its sizeable automotive sector, the survey concluded. Instant Offices employs 230 people and has clients in more than 150 countries.

The full report can be found here: https://www.instantoffices.com/blog/instant-offices-news/industry-bounce-back-post-covid-19/

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