Exeter is forecast to be one of the UK’s fastest growing cities over the next three years, according to a new economic report.
Strengths in ICT, professional services and real estate sectors are keeping the city flying high with utilities and renewables key growth drivers over the next three years.
It is ranked at number five in the whole of the country with Gross Value Added (GVA) of 2.3%, as cities in Southern England are forecast to outperform those located across the rest of the country.
According to EY’s UK Regional Economic Forecast, Exeter is on par with Bristol with both expected to grow faster than London’s 2.2% and the UK average of 1.8%. Exeter’s growth will also outpace the broader South West with its forecast 1.7% growth by 2020.
mployment in the South West shows a strong increase, with 54,000 more jobs in June 2017 than in the previous year. Looking ahead to 2020, total employment in the South West is expected to increase by 0.3% per year – just behind the UK average of 0.4%.
Andrew Perkins, Senior Partner at EY in the South West, said: “The South West is forecast to grow at a faster rate than the majority of UK regions, with only London, the South East and Midlands’ economies growing ahead. Previous forecasts have set the region’s growth at 1.3% so it’s positive to see the South West exceeding this – up to 1.7% GVA by 2020.
“With Exeter forecast to grow by 2.3% a year until 2020, the city is finally punching above its weight and is expected to be one of the fastest growing UK cities over the next three years, behind Reading and Manchester both growing at 2.4% GVA. This is underpinned by professional and back office services and real estate driving growth across the South West.”
The report projects that GVA growth in northern and devolved regions is expected to be relatively slower. The North East is forecast to experience the slowest rate of GVA growth between 2017 and 2020, growing at 1.2% per year. It is also the only region where employment is expected to decline, falling by 0.1% per year between 2017 and 2020, with the largest declines projected in the manufacturing and public administration sectors.
Mr Perkins said: “The UK has made little progress on regional rebalancing over the past three years, and we expect more of the same leading up to 2020. In fact, we expect that some of the fastest growing regions over the next three years will be the four most southerly ones, London, the South East, the South West and the East. This means that the economic gap between North and South could be larger in 2020 than it was in 2010.”
Manchester forecast to be UK’s strongest performing city, alongside Reading
Manchester is forecast to be the strongest performing city in terms of both GVA (alongside Reading) and employment growth.
Read the full report for 2017 here:
Report Key findings:
- The South continues to outpace the North, with London and the South East leading the growth through to 2020 with GVA growth per year averaging 2.2% and 2.0% respectively, with little sign of the gap narrowing over the next three years.
- Technology will be a key component of UK growth, with the ICT sector expected to achieve GVA growth of 3.5%. Manufacturing is also forecast grow by 1% over the same time period.
- Manchester is forecast to be the strongest performing city with 2.4% GVA growth and 1.2% employment growth per year between 2017 and 2020. Highlighting the strong are set to get stronger, with successful cities such as Manchester and Reading outperforming the average regional growth; demonstrating the scale of the re-balancing challenge.
EY's UK Regional Economic Forecast provides the latest UK economic forecast and examines the current economic trends and outlook for the next three years in regions and cities across the UK. They represent a detailed and directly comparable analysis of UK economic performance at a regional and city level. This report is part of our Economics for Business programme, which provides knowledge, analysis and insight to help businesses understand the economic environments in which they operate.