Growth of North West city economies set to lose momentum

Economic growth in the largest North West cities is set for a slowdown this year, according to new data.

The latest UK Powerhouse report from law firm Irwin Mitchell, put together in partnership with the Centre for Economics and Business Research (Cebr), has found that while growth will continue across the North West in 2016, the rate is set to lose momentum.

The report, which provides estimates of job creation and GVA (gross value added) ahead of official figures from the government, said that while Greater Manchester’s economy grew by 2.6% in the year ending Q3 2015, the growth rate in 2016 will drop to 2%.

Greater Manchester’s GVA is projected to rise to £57.7bn this year.

The UK Powerhouse report painted a similar picture for Liverpool, where the GVA is expected to grow by 2% in the next 12 months to hit £10.4bn. Liverpool’s economic growth stood at 2.1% in 2015.

Elsewhere, the report claimed that the North-South divide shows no signs of lessening. Over the next decade, Greater Manchester’s GVA is expected to grow by 18.3%, outstripping predictions for Leeds (18%), Liverpool (18%), Newcastle (17%) and Sheffield (15%) but falling short of London’s predicted growth of 26.9%.

The estimated value of the economic gap between London and the North stands at £62bn, but is forecast to widen by a further £53.3bn over the next 10 years.

Irwin Mitchell’s Manchester-based head of business legal services, Roy Beckett, said: “The information provided by our latest tracker also shows that there is still much to be done to tackle the North-South divide and it’s vital that more is done now before it is too late.

“The recent devolution deals unlock considerable funds to help boost investment and long-term growth in a number of these cities, however, much of the impact won’t be fully realised in 2016.”

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