Yorkshire economy set to lag behind the national average for growth and jobs

Yorkshire is set to be the second worst region in the country for productivity by the end of the decade, with the gap between the north and south set to increase, data published today shows.
Sheffield Stock pic taken from roof of Wilkos River Don towards Wicker ArchesSheffield Stock pic taken from roof of Wilkos River Don towards Wicker Arches
Sheffield Stock pic taken from roof of Wilkos River Don towards Wicker Arches

Professional services giant EY annual UK Regional Economic Forecast report shows that GVA in Yorkshire and the Humber grew but only by 1.2 per cent, second only to the North East and behind the national average of 1.5 per cent.

Looking ahead to 2020 this performance is set to improve to 1.4 per cent but still leave the region towards the bottom of the national league table.

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EY’s data suggests that total employment growth in Yorkshire & Humber is expected to flat-line, with average growth of only 0.1 per cent a year expected up until 2020.

Comment: Below average is not good enough for our great county EY said the poor performance predictions reflected a slowdown in growth outside of the larger cities as a result of lower migration and falling job numbers.

Retail, the public sector and, to an extent, manufacturing have been most affected - all of which are important sectors of Yorkshire’s economy.

It also said that in recent years cities in the north of England and in the Midlands have mostly grown more slowly than the average.

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Notable exceptions were that of Manchester, which it said “continues to build on its diverse economy”, and Newcastle, which it said was “catching up after years of slower growth”.

Suzanne RobinsonSuzanne Robinson
Suzanne Robinson

It also said that places like Hull, Sheffield and the Tees Valley have found things difficult.

The city of Leeds was predicted to outperform the region, with growth expected to be stable at 1.7 per cent but still behind the national average of 1.8 per cent.

However, although total employment in the city will continue to grow, driven by gains in the professional, scientific and technical roles as well as administrative and support services. As many as 5,000 jobs are expected to be created in these areas.

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Hull will see GVA growth of 1.4 per cent a year over the next three years, with employment expansion of 0.1 per cent. This compares with Manchester and Reading, expected to be the fastest growing cities in the UK to 2020, with GVA per year of 2.4 per cent.

Malham Cove.Malham Cove.
Malham Cove.

In every region, the fastest growing cities outpace average regional growth and the smaller towns and cities are growing more slowly.

Suzanne Robinson, Yorkshire & Humber senior partner at EY, said: “I do find the region’s growth figures to 2017 a little surprising as they don’t reflect the sentiment of many of the businesses EY engages with across Yorkshire and the Humber on a daily basis. However, it is pleasing to see that annual growth will be improving to 2020, and I’m hopeful that with the right focus on skills and the digital opportunity, Yorkshire and Humber can drive even greater gains than those predicted by this forecast.”

Mark Gregory, chief economist at EY, said: “Yorkshire’s economy is more diverse than, for example the North East’s, with strengths in technology, professional and financial services, so it does have more of a buffer and that’s why the region will fair reasonably well over the next three years.

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“The Government’s recently published proposals for the UK’s industrial strategy demonstrate how sectors will be key drivers of both productivity and the economy as a whole. The focus on manufacturing will help support many regions and cities that are located outside of the South East.”

View of Leeds City Centre from the Pinnacle Building, Leeds..7th December 2017 ..Picture by Simon HulmeView of Leeds City Centre from the Pinnacle Building, Leeds..7th December 2017 ..Picture by Simon Hulme
View of Leeds City Centre from the Pinnacle Building, Leeds..7th December 2017 ..Picture by Simon Hulme

The report also states that a cross-country rail and road network, fit for purpose in the North and Midlands, are essential requirements.

Henri Murison, director of the Northern Powerhouse Partnership, which is tasked with empowering economic growth in the north, said in a statement: “The findings from EY that the north – south divide needs more focus from government and business, along with our civic leaders here in the Northern Powerhouse is one we recognise, and as such identified a route map to address the productivity divide on in our Powerhouse 2050 report published earlier this year.

“The lack of economic progress in the short term and projected for future years in cities including Sheffield and Hull demonstrates the need for progress on devolution in these areas, and across the rest of Yorkshire.”