West Yorkshire City Projected To Enter Top 20 Cities in Economic Output By End Of 2021
A new economic study published today predicts West Yorkshire is set to recover fast from Covid-19, with Leeds forecast to enter the top 20 for economic growth by the fourth quarter of this year.
The latest UK Powerhouse report by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr), reveals that while Leeds had relatively weak economic performance in the fourth quarter of 2020, the city is expected to bounce back strongly by the end of this year, despite the end of the furlough scheme.
In Q4 2020, Leeds was 8th bottom in the report’s league table of the 50 fastest growing cities lowest of all its Yorkshire rivals in terms of economic output, on -7.1% GVA and in the bottom 20 for employment growth, on -3.2%.
Yet by Q4 2021 Leeds is predicted to see a significant reversal in fortunes, jumping over 20 places to deliver 6.5% GVA growth and to go 17th in the top 20 cities for employment, with a rise of 0.2%, this despite 14% of employees using the furlough scheme as at February 2021.
The positive signs for 2021 follow Leeds being named in The Budget as the location for the UK’s first Infrastructure Bank. Chancellor Rishi Sunak said the Yorkshire site will “invest across the UK in public and private projects to finance the green industrial revolution, beginning this spring.”
The UK Powerhouse report makes several key recommendations to tackle obstacles still faced by business caused by the disruption of Covid-19 and Brexit. These include urging firms to take advantage of policies to encourage investment and improve skills and calling on local government to have bespoke plans in place to support job creation when the furlough scheme ends.
Leeds is one of those cities to have acted on some of these recommendations in recent years, with more than £3.9bn invested in large scale development projects over the last decade. This investment, coupled with the Leeds Digital Skills Action Plan and The Leeds Economic Recovery Framework already in place, the city is well placed to face the challenges of the future.
In considering the impact of Brexit, the report concludes that while a considerable amount of uncertainty remains, Yorkshire and the Humber is one of the three regions least exposed to the Brexit deal. This is due to having the smallest share of SMEs exporting to the EU and the region and Leeds in particular continuing to be looked at favourably as a location for foreign investment.
With the latest Foreign Direct investment figures suggesting the city remains attractive to foreign investors, the city looks only to need the government to prioritise implementation of the TCA agreement and negotiate a smoother trading relationship with the EU to have all the ingredients for long term economic and employment growth post the lifting of Covid-19 restrictions.
Paddy Sturman, partner and Head of Irwin Mitchell Business Legal Services in Leeds, said:
Expert Opinion“This latest UK Powerhouse report shows that while Leeds has not had an easy time of things during the Covid-19 pandemic, the city has a positive future to look forward to.
“Despite all economic restrictions expected to be lifted before we enter the last three months of the year, the fact that only 36% of cities in the report are expected to increase employment levels by this point and that Leeds is one of them, speaks volumes for the resilience of the city.
“Projections show the city will transform from one of the worst performing in terms of economic output, to one of the best in the north and in the report as a whole. This suggests the chancellor’s confidence in naming the city the headquarters of the new infrastructure bank is not misplaced.
“Support for business over the last decade, coupled with the new bank supporting over £40bn of investment will further enhance the standing of Leeds as a commercial centre and benefit by extension the wider Yorkshire and Humber region.
“Efforts to put the city’s financial reputation and infrastructure on firm foundations are now bearing fruit and despite the best efforts of Brexit and the pandemic, Leeds looks set to be one of the UK’s success stories and a natural place to kick-start the government’s wider levelling up agenda.” Paddy Sturman - Partner