A Tale of Two South Coast Cities Underlines Region’s Resilience Post COVID-19

A new report predicts two south coast cities will be at the forefront of those leading the UK economic recovery in 2021, with hopes that a COVID-19 vaccine will herald strong growth in the region.

The UK Powerhouse report prepared by Irwin Mitchell and the Centre for Economic and Business Research (Cebr) projects that Southampton and Plymouth will recover strongly from the COVID-19 lockdown, with both forecast to be in the top 10 cities for economic growth and employment by the fourth quarter of 2021.

Expected to witness a 10% contraction in annual output growth by the end of this year, Southampton is projected to see a sharp recovery of fortune in 2021, with a 9.2% year-on-year rebound in GVA* and a corresponding 8.2% increase in employment by the end of the fourth quarter in 2021.

Source: UK Powerhouse

According to the report, this level of growth will see Southampton take number two spot in the whole of the UK for economic growth next year and one of the top ten cities expected to see employment recover.

Lower down the coast, Plymouth is also forecast to exit the coronavirus crisis relatively unscathed, with annual employment growth rates of 1.2% and 8.1% in the second and fourth quarters 0f 2021 respectively.

While the service sector is among those hardest hit by lockdown, the promise of a vaccine and life returning to normal is expected to stimulate recovery and related employment in both cities.

Southampton’s two universities make a significant contribution to local employment and related business catering for a large student population and while this has been severely limited in 2020, a vaccine should allow pubs, bars, nightclubs and related economic output to recover.

For a city that receives large amounts of funding from the EU, Brexit represents a threat to Plymouth’s projected 2021 recovery. However, any short term impact is likely to be offset by £10m from the government’s Getting Building Fund, set up in response to the pandemic to support future projects for the city council.

Sandwiched between the two, Bournemouth is also in-line to feature in the national top ten cities for employment by the end of 2021, with 7.7% year-on-year growth - not far behind the 8.1% of its two regional rivals, while a 7.6% annual increase in GVA still puts the city in the top 20 for economic growth.

Bournemouth is one of the top five cities to have seen the most eligible workers put on furlough, the extension of which has saved hundreds of thousands of jobs and will have played key role in allowing some roles in Bournemouth to weather the COVID crisis.

Elsewhere in the south, Brighton sees the third smallest economic contraction of any of the cities in the report although it was among the bottom half of cities in terms of employment performance.

Exeter and Oxford both performed well in terms of labour markets, with Exeter the second best performer among the Powerhouse cities, suggesting that it is cities in the south of England who will emerge the least unscathed from the COVID crisis and with the most intact labour markets.

Expert Opinion

“Our latest UK Powerhouse report predicts a strong recovery for the south and the story of Southampton and Plymouth are prime examples of this revival in action.

“While the service sector has been hard hit this year, a vaccine led recovery is expected to see Southampton improve quickly thanks to its strong education sector. Even a city like Plymouth, expected to face the brunt of Brexit has the promise of government funding to fall back on.

“It’s telling that Bournemouth was the only city in the south to feature in the top five of those who have seen the most workers furloughed, but extending the scheme into the New Year has not only saved jobs today, but should allow many retain their roles long enough to see the uptick in economic and employment prospects in 2021.” Hannah Clipston - Director of Strategic Growth (Corporates ＆ Institutions)