RBS: Yorkshire has slowest growth in UK

The Regional Growth Tracker said the UK economy grew by 0.7 per cent quarter on quarter, but the gains were very unevenly distributed.

London was out in front on its own, with growth of 0.7 per cent, thanks to the good performance of the IT, professional, scientific and technical service sectors.

Yorkshire finished bottom of the pile, with growth of 0.3 per cent, which economists blamed on its heavy reliance on manufacturing.

Rupert Seggins, an economist at RBS, said basic metals, coke and refined petroleum, food and beverage and wood and paper process manufacturing are all much more reliant on exports than domestic service sectors.

He added: “Global trade at the moment is struggling a little bit. It would imply that’s part of the reason those sectors have struggled.”

On the positive side, Yorkshire’s unemployment rate fell against a rise for the UK as a whole and average earnings grew by 2.4 per cent year on year, the third fastest rate of growth among the UK regions.

Mr Seggins said the rise in earnings was linked to productivity growth in the region’s manufacturing firms.

“Hopefully that’s going to bode well in the near future just by people being able to go out and spend a bit more money,” he added.

RBS said there was better growth news at the local area level. It said Wakefield, Calderdale and Kirkless and North Yorkshire all grew at a rate of 2.5 per cent to 3 per cent, which it said was “very healthy indeed”.

For Wakefield, this meant a 1.8 per cent percentage point drop in its unemployment rate, said RBS.

The worst performing subregion in the second quarter was North and North East Lincolnshire, which recorded year on year growth of 1.5 per cent, followed by Bradford and then Leeds at 1.7 and 1.9 per cent respectively.

Heather Waters, regional enterprise manager, said: “It’s been a positive few months for the Yorkshire and Humber region, and this has been backed by a business environment which has shown continued resilience.

“The fact the unemployment rate has fallen across the patch is a testament to overall investment across the region.

“The leisure and hospitality industry has played a significant role in both cities and rural communities across the region.

“Leeds Brewery has added to its portfolio of microbreweries with the opening of The Lamb and Flag which was supported by NatWest, and Harry Ramsdens continues its roll-out of new branches across all of Yorkshire creating new jobs and bringing a much-loved brand back to the region.

“The Humber region is also confident for the future as exemplified by engineering firm GGP Consult which has invested in a new HQ in Hull with NatWest funding support.

“The firm continues to embark on projects across a globe but has a strong base in Hull from which to operate from.

“The entrepreneurial sprit is alive and well in Yorkshire as demonstrated by the recent opening of Entrepreneurial Spark’s hub in Leeds powered by NatWest.

“A total of 70 small enterprises are in the middle of a six-month programme which aims to develop the entrepreneur and enable them to grow their businesses.

“The entrepreneurs or ‘Chiclets’ are developing their business plans, pitching skills and overall business acumen with bank staff investing their time to support the enterprises’ development.”

RBS said it calculated the growth estaimtes by taking the UK growth rate of each sector and weighting them by the sector shape of each region’s economy.