How the south west is outpacing the rest of the UK

ey-logoThe South West is one of the fastest expanding UK regions in 2015, with Gross Value Added (GVA) of 2.5% – outpacing the UK three year average of 2.3% – reveals a new EY forecast.

According to EY’s UK region and city economic forecast report, the South West is also the fastest growing region outside of London for employment, with 1.5% growth in 2015 and growing faster than the UK average of 1.1%.

EY’s report also predicts Bristol will be one of the UK’s fastest expanding cities over the next three years, with expected growth of 2.6% GVA between 2015 – 2018. Although, the report forecasts GVA growth in the South West will slow somewhat to 2.2% a year over the same forecast period.

Richard Jones, EY’s senior partner in the South West comments on the forecast:

“It’s a positive outlook in the South West, with economic growth of 2.5% and employment growth of 1.5% in 2015, making it one of the UK’s fastest growing regions outside of London and growing faster than the UK average.

“This growth is being fuelled by the region’s strengths in the UK’s rapidly expanding sectors, with real estate and professional services being the two major contributors to growth. In addition, transport and logistics are growing faster in the South West than in the rest of the UK. Exeter has a very strong real estate sector while Bristol will benefit from professional services and a resurgent financial service industry.”

South of England outpacing rest of the UK

Economic growth is thriving for the rest of the Southern regions, with London and the South of England continuing to outpace the rest of the UK over the next three years. London is forecast to record an average GVA of 3.0% per year over the period, with the East of England (2.5%), South West (2.5%) and South East (2.3%) likely to outpace the UK three year average of 2.3%, albeit to a lesser extent than the capital.

Mark Gregory, EY’s Chief Economist, UK & Ireland, says:

“It’s more of the same for dominant London over the next three years thanks to the city’s outstanding professional services, technology and communications sectors, the return to growth in financial services, and the boost from inward migration.

“In contrast, we predict growth in the UK will slow slightly whilst remaining stable, as inflation impacts consumer confidence, interest rates begin to rise and public expenditure reform bites. Compared to the rest of the country, these factors will be felt less in the Southern regions, which should be buoyed by good corporate investment and growth, alongside healthy property markets. Strong migration growth in the Southern regions compared to the rest of the country – bringing with it an enlarged labour force and skills – is also supporting this expansion story.”