South West of England set to grow faster than any other UK region in 2022

Does this reflect a permanent change in workforce practice or a rebound from a low base? – Owl

Hannah Baker www.business-live.co.uk 

The South West economy is expected to grow faster than any other region of the UK in 2022 including London, according to a new report.

The region’s recovery is being driven by the performance of its cities as they rebound from the effects of the pandemic.

The Demos-PwC Good Growth for Cities Index estimates the South West’s GVA – a measure of economic output – grew by 8.2% in 2021 and will grow another 6.1% in 2022.

Meanwhile the South East’s GVA is expected to grow by 5.9%, the East of England by 5.7% and London by 4.7%.

The report said the movement of city dwellers to commuter belts or rural areas amid a growing focus on wellbeing, the environment and income distribution is driving the South West’s performance.

Many cities with smaller populations have experienced – and are expected to continue to see – stronger GVA growth rates than larger metropolitan cities.

Cities in the West Country performed well in the index’s overall ranking, which takes into account factors such as health, work-life balance and income distribution.

The region’s cities were all within the top half of the 50 locations profiled, with Bournemouth coming in at second place on the list – only behind Oxford – and Swindon at third.

Meanwhile, Bristol ranked ninth on the list, Exeter at 11 and Plymouth at 18. There is evidence that some of the West’s more rural areas are also doing well, with Cornwall and Dorset both scoring highly in the index.

Ben Pykett, director in PwC’s West practice, said: “These findings confirm the resilience of our cities; we have recovered more quickly than anywhere else in the UK as we enter the post-pandemic economy.

“Combine that with the success of our cities against other metrics such as safety, health, wealth equality and work-life balance, and the West is well-placed to continue delivering sustainable growth.”

Ms Pykett said some of the West’s success since the pandemic was due to its ability to attract people who work flexibly or remotely – and who previously would have lived close to London or another major urban centre.

“Local authorities and businesses in smaller cities and other areas now have to consider how they can capitalise on changing public preferences and ensure the move away from large cities isn’t a temporary one,” she added.

The Good Growth for Cities Index measures cities’ performance against a series of 12 variables, with each one weighted relative to how important it is considered by the 1,000 people surveyed as part of the study.

In comparison to last year’s report, the importance given to these indicators by the members of the public who have been polled has shifted considerably.

Jobs and skills, two of the most important variables last year, saw significant decreases in importance in the updated Index, while the environment and income distribution saw increases.

Of the 12 variables included, the biggest driver for improvement for cities over the last three years was better work-life balance, PwC said.

Broad improvements in the skills of older workers, as well as income distribution and life expectancy, have also seen the gap narrow slightly between the highest and lowest ranked cities.

GVA growth rate by region

Region2021 GVA growth rate2022 GVA growth rate
South West8.2%6.1%
South East7.9%5.9%
East of England7.8%5.7%
London7.4%4.7%
Scotland7.1%4.9%
East Midlands6.9%4.8%
West Midlands6.9%4.8%
North West6.8%4.5%
Yorkshire and the Humber6.7%4.5%
North East6.7%4.5%
Northern Ireland6.4%4.1%
Wales6.3%4.0%

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