West Midlands to be amongst fastest to recover from lockdown restrictions

The new UK Powerhouse report by law firm Irwin Mitchell and the Centre for Economics and Business Research predicts that Birmingham will make a rapid recovery and deliver the ninth fastest year-on-year gross value added growth of the 50 cities analysed by the end of 2021.

Chris Rawstron, a partner and head of business legal services at the Birmingham office of Irwin Mitchell, said: “This latest UK Powerhouse report paints a positive economic picture for Birmingham and the wider West Midlands regions as we emerge out of lockdown.”

Making up for lost ground in 2020, Birmingham will rise from 17th place in the final quarter of 2020 in terms of economic output, to ninth, with annual GVA growth of 7.1 per cent.

In line with many other big cities, the end of the furlough scheme is expected to contribute to a fall in employment by the end of the year.

With 15 per cent of workers in the city using furlough, from a mid-table position in the last three months of 2020, employment is projected to contract by one per cent by the end of this year. This will see Birmingham drop 10 places in the study’s employment growth league table.

The recommendations in Irwin Mitchell’s latest report encourage firms to take advantage of policies to stimulate investment and improve skills and invite local government to have bespoke plans in place to support job creation when the furlough scheme ends.

With an established enterprise zone and investment plans in place, Birmingham is seen as having the pieces in place to prosper and to build on a strong manufacturing sector that makes up 14 per cent of the local economy.

While Brexit will continue to be a focus for uncertainty and is expected to have far-reaching implications, in the short term, the West Midlands is one of three regions identified has having the least exposure to the impact of Brexit through the services industry.

This is due in part to having the smallest share of small and medium-sized firms that export services to other nations, as well as its manufacturing strength and forthcoming projects in years to come.

The Government has already announced a £778 milion investment for Birmingham and the West Midlands to stage the 2022 Commonwealth Games; while longer term plans are in place to maximise the anticipated benefits of HS2, which is set to arrive in the late 2020s.

Mr Rawstron said: “Being in the top performing cities in terms of economic output should provide the scope needed to act on the recommendations and be ready to further stimulate the jobs market once the furlough scheme comes to an end.”