Mixed picture for Yorkshire’s city economies in 2016, claims new report

2016 will see a slight increase in economic growth for Yorkshire’s largest cities, according to a new report which also highlights that the Government’s ‘Northern Powerhouse’ initiative is still struggling to show signs of significant development.

Sheffield law firm Irwin Mitchell’s latest ‘UK Powerhouse’ report, which has been produced with the Centre for Economic and Business Research (Cebr), provides an estimate of GVA and job creation within 40 UK cities 12 months ahead of the Government’s official figures.

The study reveals that Leeds grew by 1.9% in the 12 months to Q3 in 2015 but that this is expected to increase slightly to 2% in 2016. The total value of the goods and services produced in Leeds is also expected to rise to £20.2bn in the next 12 months.

In Sheffield, where year on year growth up to Q3 of 2015 was 1.6%, GVA is expected to increase by 1.8% during 2016 to reach £11.2bn.

The report was also positive for Hull with growth going up from 1.6% to 1.7% but in Bradford, however, growth is expected to decrease from 1.6% in to 1.4%.

Leeds and Sheffield also managed to outform their fellow cities in the North such as Greater Manchester and Liverpool, where the rate of growth is expected to fall in 2016 compared to 2015.

London’s economy recorded 3.1% growth in the 12 months to September 2015 and although this is set to fall this year to 2.7%, the capital continues to outperform key cities of the ‘Northern Powerhouse’ region.

In addition, the report’s projections for the next 10 years still indicate that London will continue to grow at a much faster rate than other parts of the UK.

Irwin Mitchell’s report forecasts that by the third quarter of 2025, London’s economy will have grown by 26.9% since 2015. Over the next 10 years Greater Manchester’s GVA is projected to grow by 18.3% with other large cities in the North expected to record similar increases with Leeds and Liverpool growing by just under 18%, Sheffield 15% and Newcastle recording a 17% increase.

The value of the economic gap between London and the northern region currently stands at £62bn and is expected to reach £115.3bn in 2025 according to the study’s latest analysis.

Paul Firth, regional managing partner of Irwin Mitchell’s Sheffield office, said: “The information provided by our latest tracker also shows that there is still much to be done to tackle the North-South divide and it’s vital that more is done now before it is too late. The recent devolution deals unlock considerable funds to help boost investment and long-term growth in a number of these cities, however, much of the impact won’t be fully realised in 2016.”

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