West Midlands saw biggest growth in employment

A new report from professional services firm Ernst and Young also found that over the three years to 2019, the region saw an average economic growth of 2.1 per cent in Gross Value Added (GVA).

This was surpassed only by London and the East of England, but looking ahead the West Midlands growth is expected to drop to 1.4 per cent GVA until 2023 which will see it outpaced by other regions including the East Midlands (1.6 per cent).

EY’s regional economic forecast suggests that manufacturing will continue to bolster the regional economy in the West Midlands as the sector continues to contribute the most GVA up until 2023.

However, the region’s manufacturing sector’s GVA growth is expected to more than half from 1.4 per cent (2016 to 2019) to 0.5 pe cent (2020 to 2023) with employment dropping annually by two per cent over the period as technological change causes a decline in manufacturing employment.

Looking ahead to 2023, employment growth of 0.3 per cent for the West Midlands is forecast to fall below the UK rate of 0.7 per cent.

The sectors in the region that are expected to see the biggest increase in employment are the arts, entertainment and recreation and administrative and support services activities.

Birmingham – in line with the wider West Midlands – will see growth slow initially but is expected to expand by 1.5 per cent a year between 2020 and 2023, slightly ahead of the region. Employment in the city is expected to grow at an average rate of 0.5 per cent each year.

Other cities and towns in the West Midlands are expected to see GVA growth of between 1.8 and 1.1 per cent over the next four years – Walsall (1.5 per cent), Sandwell (1.3 per cent), Wolverhampton (1.2 per cent), Telford and Wrekin (1.2 per cent), Lichfield (1.2 per cent) and Dudley (1.1 per cent).

Simon O’Neill, EY’s Midlands managing partner, said: “Over the last decade, devolved powers have helped our region outperform the majority of its peers.

"Whilst its easy to be disappointed by a forecasted drop in GVA growth, largely driven by pressure on manufacturing, it is clear the West Midlands is still thriving and the prospect of Coventry as the UK City of Culture and the Commonwealth Games provides further momentum to build upon.

"Looking forward the region must think about how it can build upon its existing strengths and – although the sectors’ growth is set to slow – manufacturing will remain at the heart of the region as it continues to produce the most economic value.

"To ensure the region retains its competitive edge on the global stage, it must continue to lead the way on using innovative technology to produce high-value manufacturing."