Yorkshire and the Humber is the fastest regional economy to bounce back from the pandemic - but slow growth to come, report finds

By the end of 2021, the region’s economy, measured by gross value added (GVA), had recovered to 98.8 per cent of its 2019 size – the fastest regional recovery, followed by the North East (98.5 per cent), according to EY’s latest Regional Economic Forecast. By contrast, the UK’s GVA had recovered to 97 per cent of its pre-pandemic size.

However, the region’s lead, relative to other parts of the UK, is forecast to shrink.

Yorkshire and the Humber’s GVA is set to grow 8.8 per cent relative to its pre-pandemic size by 2025.

On an annual basis, it will be the second slowest growing region over the 2022-25 period, expanding by 2.4 per cent on average each year, ahead of the North East (2.3 per cent). This is behind the average annual UK GVA growth of 2.8 per cent.

Meanwhile, employment across Yorkshire and the Humber is forecast to rise by 0.8 per cent each year between 2022-2025, the second lowest UK regional or national increase, in line with Wales (0.8 per cent) and behind only the North East (0.7 per cent). By contrast, London is forecast to see the largest employment increase (1.3 per cent).

The report also highlights the growing gap between the UK’s towns and cities.

However, Yorkshire and the Humber has deviated from this trend with Leeds seeing its GVA fall by the equivalent of 0.8 per cent per year from 2019-21 – while the region’s towns saw their GVA fall by 0.5 per cent per year over the same period.

Looking ahead, Leeds is forecast to bounce back between 2022-25 with annual GVA growth of 2.7 per cent thanks to a mix of sectors and gains in the administrative and support service and professional, scientific and technical sectors, the report said.

This puts the city in line with Harrogate (2.7 per cent) and followed by Barnsley and Sheffield (both 2.6 per cent).

Hull is likely to experience the region’s lowest average annual GVA growth between 2022-25 at 2.1 per cent, underperforming the regional average (2.4 per cent).

EY predicts that York will experience the region’s highest employment growth to 2025 at 1.1 per cent per year driven by the human health and social work, and wholesale and retail trade sectors.

Suzanne Robinson, EY’s Yorkshire and Humberside managing partner said: “It is promising to see Yorkshire and the Humber’s economy proved so durable during the pandemic, supported by a combination of the region’s resilient manufacturing sector and robust growth in health-related services.

“Looking ahead, the recent progress towards establishing one of the country’s first two carbon capture utilisation and storage (CCUS) developments here in the region establishes a path towards green economic recovery and an increasingly dynamic future for the Yorkshire and Humber economy.”

She added: “Across the country, action is needed to ensure the recovery is balanced.

“It’s important other parts of the country are not be left behind London once again, and steps are taken to combat inequality.”