Yorkshire economy in ‘key transition period’

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Deep freeze in business investment to continue, says BCC
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The Yorkshire and Humber economy is in a key transition period, from traditional heavy industries into more diversified business sectors, a new report from Deloitte has found.

While manufacturing still represents 15% of the regional economy – above the 10% national average – sectors including financial and insurance, transportation and storage and public administration are demonstrating the strongest productivity growth, outperforming the national average since 1997.

Consulting more than 50 business leaders, educators, local government officials and other influencers from across the UK, including Yorkshire and the Humber, Deloitte’s ‘Power Up UK-Wide Growth’ report sets out to combine the ONS data with the insight from regional voices to identify how best to unlock future growth.

Business leaders in the region identified infrastructure, skills and collaboration between business, public sector and education as the key priorities for driving growth, alongside the ability to scale up business.

The report highlighted sectors with high growth in productivity, such as transport and manufacturing.

However, these did not demonstrate similar growth in employment over the same period. Manufacturing has seen a decline of 32% in employee numbers since 1997 and while transport has increased by 24%, it still makes up a relatively low percentage of the overall workforce.

Stuart Cottee, Deloitte practice senior partner for Yorkshire & the North East, said: “A clearer demonstration of the transitional nature of the Yorkshire economy, are those sectors that have delivered strong growth in both productivity and employment, such as administrative and support services; professional, scientific and technical services; information and communication services; as well as education and health. Many of which have previously been identified as regional priorities.

“Our report shows a clear diversification of the Yorkshire and Humber economy over the last 20 years. It highlights a need for better jobs, rather than simply more jobs, and these need to be targeted and focused on specific needs and opportunities.

“Yorkshire and the Humber is a large region with differing specialisms, from advanced manufacturing around Sheffield and renewable energy in the Humber, to legal and financial services and the digital sector in Leeds, as evidenced by the recent decision by Channel 4 to locate its new headquarters in the city.

“Clearly, skills and the ability to better connect people to the right jobs is a priority as the economic landscape continues to change, but the opportunity for growth is significant across the region.”

Pauline Biddle, managing partner for UK regions Deloitte, added: “Our UK regions have huge opportunity for growth. We’ve taken the overall topic of productivity to help identify where we can maximise on opportunities by learning from the past, and then combined this with the very real experiences and views of the present.

“Analysing data by industry, we looked at the best regional performer for each sector. If this performance was replicated across the UK as a whole, this would be worth an additional £263 billion to the economy, or nearly £10,000 for every UK household.

“There is an overwhelming sense of regional pride and commitment that comes through from the interviewees.

“Regional businesses need a devolution framework and for deals to work effectively. We need to plan and execute place-based strategies and work with recently appointed metro mayors in our city regions, but making sure that other areas do not lose out unfairly in spending and investment allocations.”