The South West is set to be one of the UK’s top regions for economic growth over the next few years, according to a report from EY.
Research from the financial services giant has forecast the region will see the third-fastest across the country, with its economy to grow by an average 2.1% per year between 2024-26.
Bristol is predicted to be the UK’s joint fourth-fastest growing location for Gross Value Added (GVA) between 2024 and 2026, and joint second fastest for employment growth
Meanwhile, it has been estimated that Bournemouth could match Bristol for 2024-26 jobs growth, with both expected to average a 1.7% increase in employment each year.
Bristol is also expected to avoid the contraction facing the UK economy in 2023, with 0.3% GVA growth forecast for the city this year. The UK is expected to see its GVA contract 0.6% in 2023, while the wider South West is predicted to see a 0.8% contraction.
Karen Kirkwood, managing partner at EY in the South West, said: “The rising cost of living continues to squeeze household income and put a strain on places that are dependent on high streets and consumer spending.
“The transformation that the South West has undergone over recent years, building a name for itself as a home of science, media and innovation, means it is now well-placed to weather post-pandemic economic pressures. Testament to its diverse mix of sectors, Bristol, in particular, is set to be a stand-out performer among the UK’s towns and cities.”
The report also found that the economic gap between London and the rest of the country is set to grow, amid the rising cost of living and weaker consumer spending.
EY said that over the course of 2024-2026, UK GVA is expected to grow at an annual average 2.1%, with London growing 2.6%.
Like London, the South West is also both expected to be boosted by strong growth in the information and communication sector, which is anticipated to be the UK’s fastest growing sector in the medium-term.
Rohan Malik, EY’s managing partner in the UK and Ireland for markets accounts, said: “Regions need their own visionary sectoral growth plans that define roles for the private sector, alongside government, as investors, employers and economic agents in their regions. It’s also vital to unlock investment in skills and encourage labour retention. The key to nurturing a strong sector composition is investment in high value-added sectors, like advanced manufacturing and information and communication.
“The transition to Net Zero, for example, represents a generational opportunity to rebuild the manufacturing base, upskilling workers in new energy generation and operation capabilities across the value chain from construction of solar farms, heat networks and hydrogen pipelines to electric vehicles and charging infrastructure. A one-size fits all approach won’t work though, and regions need to understand their own strengths, weaknesses, and sub-sector opportunities.”
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