The South West’s economy is unlikely to return to its pre-pandemic levels until 2024 - later than most other areas of the 海角视频 - a new report has found.
According to EY’s latest Regional Economic Forecast, the West of England is expected to see a 12.2 per cent decline in gross value added (GVA) - a measure of contribution to GDP - in 2020 and will experience a relatively slow rate of growth over the next three years.
The region’s towns are set to be slower to recover, with an annual average forecast GVA change of -0.26 per cent between 2019 and 2023.
Meanwhile, employment is forecast to fall by 0.38 per cent a year in the region over the same period.
However, there are pockets of positivity across the West Country, with the region’s cities expected to grow 0.54 per cent a year over the same time frame.
Bristol and Exeter are both forecast to average 0.54 per cent GVA growth a year between 2019 and 2023. Bristol's performance will be boosted by growth in real estate (annual average GVA growth of 1.31 per cent) and professional services (1.30 per cent), the report said.
Employment in the city, which contracted by 0.52 per cent in 2020, is also forecast to grow 0.16 per cent between 2019 and 2023, helped by gains in real estate and the public sector.
The picture for other major towns across the South West will remain challenging, however, according to EY.
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Contractions or only marginal gains in GVA across several sectors in the South West, including those most affected by Covid-19 such as manufacturing and retail, are to be expected by 2023, the report said.
The region’s hospitality sector will hold back overall growth, particularly in the near term, although the report said the national roll-out of a vaccine may open up opportunities as 2021 progresses and in the longer term.
Andrew Perkins, office managing partner at EY in the South West said: “Some of the South West’s most important economic sectors – such as hospitality, leisure and tourism, and manufacturing – are among those which have been most affected by the Covid-19 pandemic.
"It’s positive that our region’s cities are expected to fare reasonably well over the next few years, but ‘levelling up’ isn’t just about a North-South divide – the South West’s towns need attention, too.”
The report said that the Government's "levelling up" agenda could accelerate with targeted national and local action, and if lessons were learned from the pandemic’s impact on work-life balances.
Nationally, the economies of just five out of nine English regions are forecast to be larger in 2023 than they were in 2019. Three of these regions are in the South: London (0.51 per cent annual growth forecast); the South East (0.39 per cent); and East (0.08 per cent).
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Annual growth is also expected in the North West (0.11 per cent), while marginal growth (0.01 per cent) is forecast in the East Midlands.
Rohan Malik, EY’s 海角视频&I managing partner government and infrastructure, added: “The economy faces a lopsided recovery which risks setting back the 海角视频’s levelling up agenda unless concerted action is taken.
"Although images of empty city streets have attracted attention over the past nine months, the numbers show that the pandemic’s impact has been most keenly felt elsewhere."
He added: “Despite a challenging backdrop, there are opportunities to reshape the country’s economic geography.
"The Government’s recent initiatives, including the Levelling-up Fund and National Infrastructure Strategy, are welcome, but new approaches are required to avoid a growing gap between towns and cities, and North and South."