Mixed Fortunes Predicted For South Coast Cities In 2021
A new report suggests that Southampton will lead the way out of lockdown for south coast cities in terms of output by Q4 2021, but predicts a mixed forecast in terms of employment prospects.
The UK Powerhouse report by Irwin Mitchell and the Centre for Economic and Business Research (Cebr) reveals Bournemouth was in the top five cities in the UK for economic growth at the end of 2020, but by Q4 2021 it had slipped to near the bottom of the top 50 table.
By contrast, the report says that Southampton was in the bottom five in Q4 2020 with a 7.3% fall in GVA, but it moved up to 11th place and 6.9% GVA rise by the end of this year - the best performing city in the region in terms of economic output.
All UK cities saw a fall in economic output at the end of 2020 with Plymouth and Portsmouth featuring among the top 20 best performing cities.
By the end of this year, Plymouth is expected to be in the bottom 10 for GVA growth, recording a 6% year-on-year growth. Bournemouth and Portsmouth only just above with 6.1% and 6.2% respectively. Brighton is expected to perform slightly stronger with a predicted growth of 6.3%
All south coast cities in the report returned a mixed performance in terms of year-on-year employment growth, with Plymouth 6th bottom on -6.8% and Portsmouth on 1.7%.
Employment expected to recover slowly across the board. Bournemouth manages a top 20 spot with 0.4% and Plymouth comes in 21st on 0.3%. Portsmouth is mid-table on -0.7% and Brighton is in the bottom 20 on -1.0%.
Southampton is also forecast to see a 1.7% drop in employment growth in the year to Q4 2021, placing it in the bottom 10 out of all the 50 towns and cities in the report.
UK Powerhouse makes several recommendations to tackle the difficulties business face coming out of lockdown. These include the need to take advantage of policies to encourage investment and improve skills and local government having bespoke plans in place to support job creation.
The UK Government should also prioritise implementation of the TCA with as little disruption as possible to businesses and negotiate a smoother trading relationship with the EU post Brexit.
Only 36% of cities in the report are expected to increase employment levels in Q4 2021, but looking into 2022, the announcement of the Solent Freeport area offers hope for the future.
Solent Local Enterprise Partnership (LEP) research suggests that more than £2 billion could be invested in the region through lower taxes and less red tape for businesses in the designated Freeport area, creating up to 52,000 jobs and giving the region as a whole a big economic boost.
Expert Opinion“In the current economic climate, fortunes change fast and Southampton and Plymouth have moved from being projected top 10 cities for economic growth and employment by the end of 2021, to Southampton slipping to 11th place, while Plymouth falls into the bottom 10.”
“Southampton’s two universities and the corresponding student population make a major contribution to local employment, but with the end of furlough, it doesn’t look like the lifting of Covid-19 restrictions will be enough to filter through to local job prospects this year.
“It’s a mixed picture again for the region in terms of Brexit. Any restrictions on trade are going to have an impact and Plymouth has traditionally received considerable funding from the EU. The £10m from the government’s Getting Building Fund, set up to support future city council projects will help, as will the Freeport area, but there is little room for complacency in the months ahead.”
“The south coast has traditionally done well from its hospitality, entertainment and tourism sectors and it remains to be seen how fast these will recover from the lifting of Covid-19 limitations. Powerhouse shows the services sector did see growth of 0.6% in Q4 2020, but subsectors like accommodation, food and services saw contractions of up to 32.8%.
“The Freeport will help with employment and growth of the Solent area, while the vaccine rollout, coupled with a lifting of lockdown restrictions should put an end to what is a significant drag on total output growth for the region as a whole, but this may not be enough to deliver a significant uptick in the figures or overall job prospects by the end of this year.” Hannah Clipston - Director of Strategic Growth (Corporates ＆ Institutions)