Output To Grow By £700m Over Next 12 Months
A new economic report claims that the expected resolution to the global supply shortages in the automobile sector will help Birmingham become home to one of the fastest rates of employment growth by the end of 2022.
The UK Powerhouse study, which is a joint study by Irwin Mitchell and the Centre for Economics & Business Research (Cebr), analyses 50 of the largest local economies by employment and GVA growth.
The latest report says that by the end of this year, Birmingham’s GVA is estimated to have increased year-on-year by 7.5%, with the number of people in work increasing by 3.9%.
Birmingham is predicted to see employment levels grow to the 7th fastest over the next 12 months, increasing year-on-year by 2.2 % and adding almost 14,100 new positions filled.
The GVA outlook 2022 is relatively good with a year-on-year forecast to Q4 2022 of 2.9%.
Strong growth this year has been boosted by health and social services which make up a large share of Birmingham’s labour force. It says the city has benefited as health services have been able to offer non-COVID related services again as the numbers infections decreased during 2021. Retail trade, which makes up the third largest share of GVA, was also among the key beneficiaries of the lifting of restrictions.
It adds that Birmingham will be boosted by a resolution in 2022 to the global supply shortages which are affecting the automobile industry.
Although Birmingham is predicted to have a relatively strong 2022, there are signs that the Midlands is falling behind to other parts of the UK. Hotspots such as Oxford, Cambridge and Milton Keynes are predicted to see year-on-year GVA growth of 3.3% by the end of 2022. This will result in a total of £1.8bn being added to their combined economic output.
Hannah Clipston, partner at Irwin Mitchell, said: “The UK’s economy has undergone significant change over the last two years and this report highlights that the recovery is unlikely to be linear or even uniform.
“Over the next 12 months our report predicts that manufacturing’s output will grow by 3.5% whilst for hospitality it will grow by 35%. This has a huge impact on the variations that we are seeing in terms of growth in different locations and should be considered by the government as it looks to level up and tackle disparities in economic growth.”
Irwin Mitchell’s report also examines to what extent disruption in the economy leads to innovation. Here the study reveals that West Midlands comes fourth with 39% of businesses defined as innovative.
Hannah added: “Businesses have been incredibly resilient over the last couple of years and have faced many disruptors including COVID, labour shortages, supply chain issues and high fuel costs.
“Our latest study recommends that irrespective of the sector they’re in, organisations should be adopting technology more quickly and adapting to the UK’s new status after Brexit.
“All of this will require a shift in approach and for innovation to be celebrated and nurtured more than it is currently. It’s vital that businesses are encouraged to follow this path and receive the right level of support in order to help them succeed.”