Industry in the Midlands 2018, part 2: regional economic trends

Introduction

Our three-part series looking at industry in the Midlands aims to give you facts and figures concerning key trends from 2017 and potential barriers to growth in 2018. What are some of the key metrics that might tell us how the Midlands is performing compared to other regions?

In this second of our three-part series, we look at a number of factors which might help us understand some important economic trends in the Midlands. Let’s look at the data in some more detail.

Economic bellwethers - reasons to be cheerful

  • Figures from the Office for National Statistics (ONS) show a 4.7% increase in Birmingham’s economic output during 2016 (a rise of £1.2bn in the period). This is higher than both the London growth figure (3.2%) and the national average (2.6%).
  • The West Midlands is one of the top-performing regions in the UK according to regional Purchasing Managers' Indexes (PMIs). PMIs are an indicator of health in the manufacturing sector, and it’s encouraging to see strong performance from the Midlands.
  • In another positive indicator of prosperity, house prices are on the up for the region. While London saw growth slow in the year to end November, the West and East Midlands saw house price growth outpace that of the UK as a whole.

Reasons for caution

  • Gross Value Added (GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy.  In the latest UK Powerhouse report from Irwin Mitchell, annual GVA growth slowed as car sales reduced.

Taken together, the economic indicators for the region are fairly positive. Strong house prices, higher than average growth in output, and high rankings in PMIs indicate that prospects might be relatively rosy for the Midlands in 2018.

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Head here to read the first instalment of our series, which deals with investment trends in the region. You can read our final piece, which focuses on barriers to growth, here.

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Written on in Business Insights
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