Friday, August 12, 2022

East Midlands expected to reach pre-Covid levels of output next year – KPMG

A combination of restrictions lifting, pent-up consumer demand, accumulated excess savings and a range of government incentives are expected to spark a strong lift-off for the East Midlands economy by 2022.

This will see the region’s GDP grow by 6.3% in 2021 and 4.8% in 2022*, allowing the economy to reach its pre-Covid level by Q1 2022 according to the latest analysis in KPMG’s UK Economic Outlook.

The contraction the East Midlands suffered last year was mainly caused by falls in manufacturing, wholesale and retail trade, however given manufacturing operations were not restricted after the first lockdown, recovery was able to begin.

The region’s large manufacturing presence is likely to benefit from the increased demand for investment, as well as the introduction of the super deduction allowance on plant and machinery introduced in the 2021 Budget.

The outlook for all regions and nations of the UK is one of a recovery in both 2021 and 2022, although at varying speed, with strongest growth expected in the West Midlands, London and the East of England.

This reflects the uneven impact of the pandemic across sectors and regions, with a relatively quick bounce-back in manufacturing leading much of the early gains in output. However, as the economy re-opens and restrictions lift, the shift towards a services-based economy will resume across most of the UK.

Marc Abrams, East Midlands Office Senior Partner, said: “Our latest analysis shows that the East Midlands’ pace of economic recovery is accelerating as restrictions ease and looks set to do so at a quicker pace than the majority of the UK’s other regions.

“The challenges of the last 12-18 months have impacted everyone in some way, shape or form, with sectors such as tourism, hospitality and retail being more acutely affected than others. There’s still a way to go, and as business and consumer confidence begins to pick up, recovery and growth are likely to remain the focus for many.

“One of the many great things about the East Midlands is the variety of its businesses and the breadth of skills available, which will be beneficial in enabling a broad-based recovery. The new freeport will also present opportunities for stronger growth in the long term, increasing the region’s attractiveness for inward investment.

“Whilst there’s a sense of cautious optimism, and rightly so, it’s still incredibly encouraging to see that the East Midlands’ GDP growth could return to pre-pandemic levels by the start of next year.”


KPMG’s June forecasts for the UK economy 

  2020 2021 2022
GDP -9.8 6.6 5.4
Consumer spending -10.6 5.7 8.6
Investment -8.8 8.0 6.6
Unemployment rate 4.5 5.1 5.3
Inflation 0.9 1.7 2.1
Base interest rate 0.1 0.1 0.1


Source: ONS, KPMG forecasts. Average % change on previous calendar year except for unemployment rate, which is average annual rate. Investment represents Gross Fixed Capital Formation, inflation measure used is the CPI and unemployment measure is LFS. Interest rate represents level at the end of calendar year.

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.

Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.