Sheffield's economy set to return to growth at faster rate than all other Yorkshire cities, new report finds

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 gross value added (GVA) 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.

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.”

“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.”

According to the research, Sheffield’s economy is predicted to be 0.5 per cent larger in Q4 2023 than it was at the end of last year.

York and Huddersfield are expected to record 0.3 per cent annual growth followed by Leeds, Doncaster and Rotherham which are all on 0.2 per cent.

Leeds however is expected to perform the strongest across Yorkshire in terms of jobs.

The city is predicted to be in the top 10 for employment growth in both Q4 2022 and Q4 2023, with annual employment growth of 1.5 per cent.

The report says financial and business services is a key source of growth in Leeds, while the creative and digital sector is also expected to help the city through the expected recession.

Sheffield comes next in terms of annual employment growth with 1.2 per cent, followed by Rotherham with 0.9 per cent.

Hull’s annual employment growth rate is expected to be 0.9 per cent, Bradford’s 0.3 per cent, and Doncaster’s 0.1 per cent.

Huddersfield and Wakefield are both expected to fall into minus figures, with -0.1 per cent and -0.5 per cent respectively.

Josie Dent, managing economist at Cebr, said:”2023 will be a difficult year for consumers and businesses across Yorkshire, 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.”

For 2022, Huddersfield was ranked third place In terms of overall GVA growth, behind only Reading and Inner London on the Q4 city tracker table.

The report notes that going forward, pressures on spending activities will be concentrated amongst the wholesale, retail and hospitality sectors.

It notes that due to this, cities with a large retail sectors are likely to feel the impacts of the recession more strongly than others.