2.3% Increase In Economic Output Set To Give City A £300m Boost Next Year
A new report predicts that Brighton will bounce back strongly from a poor economic performance in 2021 to be one of the UK’s fastest growing cities by the end of 2023.
The latest UK Powerhouse report from Irwin Mitchell, produced by the Centre for Economics and Business Research (Cebr), predicts Brighton will leap 38 places in its league table of cities, moving from 43rd for economic output growth in Q4 2021 to 5th by Q4 2023.
Brighton is also expected to see a modest improvement in job prospects, rising from 38th to 29th, with 1.1% year-on-year growth translating into 3,100 newly filled positions by Q4 2023. This is alongside the 2.3% rise in GVA* which represents a £300m boost for the city’s economy in Q4 2023 compared to the end of last year.
The report puts Brighton’s success down in part to the cluster of tech businesses located in the city, a factor it shares in common with others in the top five locations for economic output.
The tech sector has proved a significant driver of economic growth in the UK in recent years, particularly when coupled with Foreign Direct Investment** (FDI). South East England is second only to London in terms of the number of FDI projects the region has, despite a 23% decline in 2020/21.
Bryan Bletso, partner and Head of International at Irwin Mitchell, said: “The UK Powerhouse report makes good reading for Brighton. While job creation is not as high as the city would wish, an impressive economic recovery is a powerful consolation and all the economic ingredients are in place for a sustainable, successful future.
“It’s no secret that the South East’s stranglehold on FDI is a factor behind the region’s success and it remains to be seen how far the government’s levelling up policies, aimed at reducing economic disparities will impact on this.
“While cities like Brighton continue to dominate in the fastest growing industries, there is no suggestion this will change and the government will be keen to ensure levelling up does not mean levelling down in the South, when sustained growth is essential for a global Britain.
“The UK Powerhouse report has consistently predicted robust growth for Brighton and the South East and despite what now looks like a blip in Q4 2021, the city is expected to be back on track and poised to deliver another regional masterclass in terms of economic growth next year.”
Josie Dent, Managing Economist at Cebr and one of the report’s authors, said: “The economy is still expected to face some turbulence between now and the end of next year, notably through volatility in commodity prices, supply chain pressures, and the emerging cost-of-living crisis domestically. All of these factors are set to impact growth both at the aggregate level and, to a varying extent, within individual cities.
“This report highlights that much of the fastest growth during next year will be concentrated in the South. Locations such as Milton Keyes, Cambridge and Oxford have economies which are dominated by fast-growth sectors and they have also been hot spots for overseas’ investment. If economic levelling up is to be tackled effectively, these two issues must be recognised and quickly addressed.”
*GVA – Gross Value Added (the total value of goods and services produced)
** Foreign Direct Investment (FDI) refers to cross-border flows where an investor establishes a lasting interest in a subsidiary located in a country that is not the investor’s. Typically, 10.0% or more of the organisation’s voting power should be controlled by the foreign investor for this to represent a lasting interest.