New report from accountancy firm EY revises down previous GVA and employment forecasts for Liverpool but says the city’s resilience will see it continue to grow in the next two years. Tony McDonough reports
Liverpool’s economy and employment base is still set to grow over the next two years despite the devastating effects of the COVID-19 pandemic, a new study claims.
However, the research by accountancy firm EY shows growth will be much slower than originally predicted. In February 2020 EY published its Regional Economic Forecast and said from 2019 to 2023 Liverpool would enjoy GVA growth of 1.8% a year.
It also predicted employment growth for the city of 1% a year, the equivalent of 11,600 over the three year period. However, EY has now revised those forecasts down for the rest of the period. It now expects GVA to grow at 0.19% a year and employment to grow at 0.4% a year until 2023.
Similar to the rest of the UK, Liverpool’s retail and leisure sectors have been among the hardest hit from the pandemic and it is anticipated they will continue to struggle well into 2021. Instead, EY says employment growth in the city is likely to come from the human health and social work, property and public administration sectors.
Taken as a whole, North West GVA is expected to see an average annual increase of 0.11% between 2019 and 2023 – a difference of 0.4% and 0.28% respectively, when compared to top performers, London and the South East.
Although the North West will see employment decline at a rate equivalent to an average of -0.08% a year by 2023 compared to 2019, it is just behind those same two southern regions – the only regions to see positive growth over the same time period.
The professional, scientific and technical and wholesale and retail sectors will be the most dynamic in the region, with the latter benefitting in the near-term from pent-up demand, according to the report.
Jenn Hazlehurst, EY’s Liverpool managing partner, said: “The North West region is fortunate to have a fairly mixed economy and therefore it remains resilient.
“While it’s encouraging to see positive GVA growth across our core North West cities, with Liverpool performing strongly, it’s also important that our towns are not be left behind as the economy recovers from the COVID-19 pandemic.
“Manufacturing, arts and leisure, and hospitality – crucial parts of the economies in towns, and indeed across large parts of the North – have been most affected during the pandemic or are likely to take longer to recover.”
Manchester is expected to lead the North’s growth table with equivalent average annual GVA growth of 0.51% forecast and annual employment growth of 0.42% forecast between 2019 and 2023. Manchester’s relatively favourable employment and GVA outlook is underpinned by gains in the professional, scientific and technical sectors.