Cities in the East Midlands will see their economies return to growth in the second half of 2023 but at a slower rate than Birmingham and cities in the South East, according to a new study by law firm Irwin Mitchell.
The Irwin Mitchell City Tracker has been produced by the Centre for Economics and Business Research (Cebr) and examines 50 locations across the UK, forecasting future growth in terms of GVA and employment.
The report, which estimates that the UK entered into a recession in the second half of 2022, expects economic growth to resume in the second half of 2023.
According to the research, Nottingham and Leicester’s economies are predicted to be 0.6% larger in Q4 2023 than they were in the final quarter of 2022. Derby is expected to be further behind at 0.5%.
Derby however leads the way among East Midlands cities in terms of job creation with a 0.9% year-on-year increase expected in the final three months of 2023. This is set to take total headcount to 135,300.
Leicester is predicted to see job growth of 0.7%, whilst Nottingham’s rate of growth in this area is predicted to be 0.5%.
Charlotte Rees-John, partner and head of Irwin Mitchell’s consumer sector, said: “Last year presented numerous challenges and the downward pressure on spending activity, which continues to be concentrated in the consumer sector, looks set to continue throughout the first half of 2023.
“The consumer sector has however been one of the most resilient, agile and innovative sectors in recent times and those businesses that succeed during 2023 will be in a very strong position to take advantage of a more stable economic environment in 2024.
“Considering longer-term aspirations, such as the transition to carbon net zero, is something all businesses, irrespective of the sector they are in and the pressures that they are facing, need to do. ESG is fast becoming a priority for the majority, particularly at a time when there is huge pressure and scrutiny from consumers and investors who are increasingly making their decisions based on ethical as well as financial factors.”
Josie Dent, managing economist at Cebr, said: ”2023 will be a difficult year for consumers and businesses across the Midlands, with the cost-of-living crisis expected to lead to falling economic activity. However, Cebr forecasts that economic growth will resume in the second half of 2023, with most cities expected to see an annual expansion in GVA by Q4 2023.”
