South West Economy Expected to be 9% Larger in 2025
EY’s latest Regional Economic Forecast shows that the South West is set to be one of only two UK regions forecast to close the economic gap to London by 2025. It is expected to be 9% larger in 3 years’ time than it was in 2019. For the full picture please read the news bulletin below issued by Insider Media today.
Roger Mundy, Managing Director, Beardsley Theobalds, 1st February 2022
South West Set to Close Economic Gap to London – EY
The South West is set to be one of only two UK regions forecast to close the economic gap to London over the next three years, according to new data, as the country recovers from the impact of Covid-19.
EY's latest Regional Economic Forecast shows that the South West economy – measured by gross value added (GVA) – is expected to be 9 per cent larger in 2025 than it was in 2019.
This is estimated to be the second largest increase among English regions behind only the East Midlands at 9.5 per cent and ahead of London at 8.9 per cent.
The UK's GVA is forecast to have grown 8.3 per cent relative to its 2019 performance by 2025.
On an annual basis, GVA and employment in the South West are forecast to grow at a similar pace to the rest of the UK from 2022 to 2025, with average annual growth rates of 2.8 per cent and 1 per cent respectively.
The region's lead over London by 2025 is down to its resilient performance during the initial stages of the pandemic, according to the report, with the South West's GVA 2.5 per cent lower by the end of 2021 than it had been in 2019.
Despite strong performances, the report sets out the scale of the task needed to level up the UK economy, with the gap between London and the rest of the country set to grow again during the post-pandemic recovery.
The capital is on course to regain lost ground to the South West and East Midlands beyond 2025 too.
Karen Kirkwood, office managing partner at EY in the South West, said: "The South West's economy has undergone a period of transformation in recent years, moving away from more traditional manufacturing to focus on other sectors, including administrative support and services.
"Covid-19 has undoubtedly had a significant economic impact on the region, but the local economy has proven to be resilient and is now well placed for a good recovery post-pandemic.
"However, with the data showing London recovering from the pandemic more quickly than much of the rest of the of the country, action is needed to ensure the South West doesn’t get left behind in the long-term."
She added: "Greater flexibility on where people work, aided by the pandemic, could help this. Focusing on what attracts people and businesses to a region, attracting the right mix of sectors and job opportunities, and tackling issues that affect quality of life will be key to taking advantage of this."
Bristol's GVA is expected to expand by 3.1 per cent per year between 2022 and 2025, the fastest rate of growth in the region. This is set to be supported by positives from the real estate and professional, scientific and technical sectors.
After Bristol, the fastest growing regional locations are expected to be Torbay, Stroud, Exeter, Taunton Deane, Plymouth and Swindon.