The Midlands is home to 11 million people and contributes £239 billion to the UK economy. It is an area of innovation and enterprise; a ‘young region’ providing talent for future wealth and prosperity, it is a region that is indispensable to the nation’s post-pandemic recovery. The COVID-19 pandemic has hit the area hard, with the West Midlands reportedly the worst hit region in the UK where over a quarter of the Midlands businesses are reporting a decline in trade as a result of the pandemic. The Midlands hosts a diverse economy with its rural and urban mix; manufacturing, higher education, creative industries and visitor economy are all key sectors and have been deeply impacted by the pandemic.
The West Midlands’ economy is expected to shrink by 10.6 per cent in 2020 as it battles the ongoing impact of coronavirus, according to new research. It is a further slip after financial services firm KPMG predicted the region’s economy would fall by 9.1 per cent in its last quarterly Economic Outlook report, published in June. The firm said its latest forecasting model suggested Stratford-upon-Avon and North Warwickshire would be hit hardest among the West Midlands’ districts, with drops in GVA of 14.4 per cent and 12.7 per cent respectively.
Meanwhile, the Malvern Hills area looks set to face the lowest impact, with a reduction in GVA of 8.3 per cent, the report suggests. UK-wide, KPMG is forecasting GDP decline of 10.3 per cent for 2020, downgraded from 7.2 per cent predicted in June, with growth of 8.4 per cent in 2021.
To accelerate the levelling up agenda, the Government’s aim should be to tailor sector opportunities to local conditions. These should dictate what is needed for investment in skills, transport, digital and social infrastructure. Manufacturing and technology will be key to the levelling up agenda. Although a difficult near-term is forecast for the sector, opportunities are there longer-term and must not be ignored or forgotten.
Investment for advanced manufacturing, automotive, software and computer services and business and consumer services are leading sectors in the Midlands. This also includes a strategy to maximise opportunities for the region for the 2022 Commonwealth Games.
Let’s not forget the clear given commitment to its major infrastructure, commercial and residential development projects, the success of the West Midlands as a UK regional hub looks set to continue, regardless of the anticipated economic downturn caused by the Covid-19 pandemic.
The HS2 project in particular has begun connecting small companies, large companies and investors to help increase economic benefits and sustainability, by embedding circular economy principles and digitally enhancing productivity in HS2 itself and the wider projects planned around the railway.
One of the West Midlands’ main advantages is its combination of attractive scenery with affordable places to live and thriving urban centres that support both jobs and entertainment opportunities. As we finally enter into a new year, we should turn our attentions and endeavour to focus on these promising hubs, where industry and business are ready to be our remedy for 2020.
Image source: Business Leader, 2020.