Liverpool’s closest rival, Manchester, is predicted to be one of the strongest-performing cities in the UK over the same period with GVA expected to grow by an average 2.2% a year
Liverpool ’s GVA growth is predicted to accelerate to more than double to 1.5% a year to 2021, a new study says – higher than the average 0.7% growth from 2015 to 2018.
However, the report by accountancy firm EY adds that employment growth in the city will slow from an average of 1.7% a year from 2015 to 2018 to 0.5% for 2018 to 2021 – in line with UK figures.
Liverpool’s closest rival, Manchester, is predicted to be one of the strongest-performing cities in the UK over the same period with GVA expected to grow by an average 2.2% a year to 2021 – with employment growth also at 1.2% a year – according to EY’s Regional Economic Forecast.
Public sector decline
The North West is forecast to slightly underperform the UK as a whole, which is predicted to have GVA growth of 1.7% a year to 2021. However, the region has performed strongly since 2015, narrowing the gap with the growth leading regions, and benefitted from its diversified economy.
Employment growth is also expected to be driven by the business service sector, offsetting a decline in public sector jobs and also in manufacturing. Manufacturing has grown over the last three years and employment has increased as a result.
However, it is expected to grow more slowly over the next three years as technology is used to drive higher productivity in a more challenging labour market.
The report says that a slowdown in the retail sector, especially on the high street, also poses significant challenges for smaller towns and communities as retail tends to be a major employer in these locations.
Given these contrasting drivers, combined with a slowing economy, expected lower EU immigration and technological change, North West employment is expected to grow at 0.5% a year to 2021, in line with the UK as a whole (0.5%), as a result of this anticipated shift in the labour market over the next few years.
Bob Ward, North West senior partner at EY, said: “Manchester’s success is much lauded and rightly so – that the city is once again leading the UK with comparatively strong employment and GVA figures is of course great news.
“However, it’s time for the debate to move on and for local public bodies and government to start solving the puzzle of driving growth across this region’s other cities and towns. One great success story is not enough – we should have similar growth stories across Lancaster, Salford, Preston and Carlisle.
“I am heartened to see that Liverpool’s GVA growth is predicted to improve significantly over the next three years when other cities are seeing growth slow.
“Diving into the detail, that is driven by a general increase across a range of sectors but particularly noticeable is a considerable increase in GVA growth from the information & communications sector, albeit from a low base.
“The North West region is fortunate to have a fairly mixed economy and therefore it remains resilient and sits middle of the pack in terms of predicted GVA growth, albeit slightly below the UK average.
“To drive it up that league table there is of course the widely reported requirement of better infrastructure and connectivity. But there is also a need to reskill our labour market and focus on the huge opportunity presented by digital and technology.”