East ‘geared for growth’ as it powers out of Covid pandemic, study finds
- Credit: Ian Burt
The East of England looks set to power out of its Covid slump, financial experts believe.
Accountancy giant EY’s latest Regional Economic Forecast shows a positive picture in the East, with a “robust” economic recovery.
It forecasts the region’s Gross Value Added (GVA) performance will grow 2.8% per year to 2025 – in line with the national average – and that its working age population will grow by 1.6% by mid-decade – the second fastest growth rate in the country.
It predicts that Norwich will be among the population centres leading the charge, and that it will be the region’s fastest-growing location as its GVA soars by an expected 3.1% a year between 2022 and 2025.
Overall, in GVA terms, the region’s economy is expected to be 8.5% larger in 2025 than it was in 2019 – slightly ahead of the UK average of 8.3%.
The East’s annual GVA growth is expected to be 2.8% between 2022 and 2025 – which is in line with the national average.
The forecast performance by 2025 is down to its economic resilience in the early part of the pandemic. Its GVA was 97.2% of its 2019 size by the end of 2021, which was ahead of the UK average of 97%, said EY.
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The East of England is also one of only four UK regions whose working age population should grow by 2025. The region’s forecast 1.6% growth is behind only London (4.7%) and ahead of the South East (1.1%) and the East Midlands (0.1%). Over the next three years, employment in the region is expected to rise on average 1.1% per year.
Norwich’s GVA growth will be fuelled by the education and administrative & support service sectors. Cambridge and Luton are forecast to grow by 2.9%. Cambridge’s expansion will be powered by the professional, scientific & technical and education sectors, it said.
After these, the fastest growing regional locations are expected to be Peterborough (2.6%), Southend (2.6%) and Bedford (2.5%). Ipswich isn’t covered in the report. However, EY’s research suggests that major cities will grow at a faster rate than towns.
Stuart Wilkinson, Office Managing Partner at EY in the East of England, said the region, like many other parts of the UK, has seen some considerable economic challenges due to Covid-19 but had bounced back well with positive signs of a post-pandemic recovery.
“The region’s ability to attract highly skilled professionals across a broad range of sectors and retain those working in key industries – including life sciences, technology, and agri-tech – is crucial to maximising economic recovery and business growth. It also has the potential to act as a draw for global businesses as they look to open or expand operations in the UK. An increasing working age population is a positive sign of the East of England’s enduring attractiveness as a place to live, work and invest,” he said.
“Greater workplace flexibility and the switch by many businesses to hybrid working could help open up more opportunities. Focusing on what attracts people and businesses to a region and tackling issues that affect quality of life will be key to taking advantage of this.”
The East of England’s fastest growing sector between 2022 and 2025 is forecast to be accommodation and food service (up 8.2%), while the fastest growing of the region’s five biggest sectors will be the construction sector (up 2.7%).