North West economy set for steady growth

The economy of the North West is set for steady growth over the next three years, but it will be some time before the Government’s Northern Powerhouse vision realises its potential, according to a new report.

The latest EY UK Region and City Economic Forecast from professional services giant Ernst & Young (EY) has predicted that Manchester will expand more quickly than any other city outside the South.

EY’s report forecast the region’s economy to grow by 2%, in terms of gross value added (GVA), between now and 2018, which is 0.3% behind the wider UK average.

In 2015, Manchester is expected to see employment growth of 1.2%, while Liverpool will see jobs growth of 0.6% in the next three years.

EY’s North West senior partner, Simon Allport, said: “Our report predicts that the North West’s economic growth over the coming years will be steady, supported by a buoyant property market relative to much of the rest of the UK, and its strong financial and manufacturing sectors.

“However, the forecast also points to a clear growth gap over the next three years between the Northern regions and those in the South of the country, which are set to benefit from good corporate investment and growth, healthy property markets and strong migration levels.”

He added: “To close this gap, regional expansion needs to be addressed at a national policy level, as well as through devolved measures and infrastructure investment – both of which are already a Government focus and have drawn significant attention.”

Elsewhere, the EY UK Region and City Economic Forecast report has said that the Government’s Northern Powerhouse will have only a limited impact in the short term.

Mark Gregory, EY’s chief economist for the UK and Ireland, said: “Our forecast predicts that the impact of the Northern Powerhouse and national infrastructure projects will only really start to be seen after 2020.

“HS2 will not open for another decade and the devolution of powers to cities such as Manchester and Liverpool will only become fully effective when budgets are aligned and funds are used efficiently.”

Mark added: “It will take time for the benefits to translate into real growth.”

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