Southampton's economy among best in the UK for growth
SOUTHAMPTON’S economy performed better than that of any other city on the south coast earlier this year, a report has found.
The level of growth in the city put it in the top 10 nationally and ahead of Portsmouth.
The UK Powerhouse report, published by Irwin Mitchell and the Centre for Economic and Business Research (Cebr), found Southampton’s economy was worth £6.5billion in gross value added (GVA) in the second quarter of 2019 – up 1.6 per cent on the same period last year. It accounted for 153,000 jobs.
The city is eighth in a national league table, outstripped by the likes of Reading, Cambridge and Milton Keynes but ahead of Portsmouth and Birmingham.
Southampton’s economy is predicted to grow by 18.5 per cent over the next decade, with employment expected to rise by 10 per cent, the report said. Portsmouth is expected to see 16.7 per cent growth and a six per cent rise in employment.
The report also included a ‘Brexit Disruption Index’ which analyses which industrial sectors will be affected most after the UK leaves the EU.
It bases its predictions on analysis of the change in three key indicators – the free movement of labour, tariffs on exports to the EU and investment into the UK from the EU – and assumes that a deal will eventually be agreed.
According to the study, manufacturing will face more disruption as a result of Brexit than any other sector. Manufacturing has an index score of 90 per cent and the report says that even if a deal is secured the sector will contract by 0.8 per cent in 2020, after a fall of 0.5 per cent this year.
Hannah Clipston, partner and head of business legal services at Irwin Mitchell in Southampton, said: “This report should give the business community in Southampton a reason to be optimistic in the long term despite the knock-on effects of Brexit.
“Southampton’s strength is the diverse nature of its business sectors which includes marine, tech, leisure, education and real estate. Manufacturing will be disrupted the most, but it has always adapted and I’m sure that this combined with our range of industries will stand us in good stead for the future.”
The report also predicted that Brexit would hit consumer confidence, the construction and industry, finance and insurance. Public administration and defence would be the least disrupted, because they rely less on workers from other EU countries, while accommodation and food services could continue to benefit from the lower value of the pound.
“In the short term, Brexit is going to disrupt the economy, regardless of the exact terms under which the UK leaves the European Union,” the report said.
“The UK is structurally integrated with the EU’s other member states.
“Withdrawing will result in significant disruption for many industries, as cross-border supply chains, investment, the availability of labour and demand for British goods and services are all affected.”