Both East and West Midlands have come out first and second when it comes to areas of high investment based on data in a new quarterly economic study from KPMG UK and the University of Nottingham.
The newly launched Local Business Pulse Index (LBPI) showed that both areas have been identified as High Investment Areas – places which share an expected high rate of growth in business investment – with 40% in the west and 33% in the east, first and second respectively when compared to the rest of England and against an average of 18%.
Standout areas identified for high levels of investment included:
- East Midlands – Amber Valley, Hinckley, North West Leicestershire and Ashfield
- West Midlands – Cannock Chase, Nuneaton, Stafford, Tamworth and Sandwell
The data also showed that both areas were showing high levels of new business creation with 30% in the west and 20% in the east, above the national average of 17%.
The LBPI provides data insights across 363 UK areas, drawing on geographic, sub-national data covering businesses, employees, and consumers. The online tool is aimed at businesses and local government leaders and includes an interactive map of Scotland, England and Wales, with navigable local and regional business growth perspectives and detailed snapshots of individual areas.
The insights are placed into seven clusters designed to reflect common business conditions and shared economic strengths. These include Business Creation; Sales Growth; High Investment; Employment Growth; Research and Development; Consumer and Leisure; and High Productivity.
Andy Bostock, Birmingham office senior partner at KPMG, said: “Understanding and harnessing local economic strengths is central to securing regional growth across the UK. Data-led insights drawn from the Local Business Pulse Index can support local leaders as well as inform investment and policy decisions.
“Across the Midlands, both the east and west are seeing higher levels of investment compared to the rest of the UK, a great result in a time of economic difficulty.
“The East Midlands is also benefiting from high consumer spending whereas research and innovation is a major growth area for the West Midlands.
“Overall, data from the Local Business Pulse Index is positive across several key sectors in the Midlands and outlines clear pathways for growth in the coming quarter.
“As a firm with a heritage in the UK regions, we work with local businesses across the country to identify productive, local potential. Our collaboration with the University of Nottingham provides detailed local snapshots on key drivers of growth.”
Further insights for Midlands in Q3 2023 include:
- The East Midlands stands out for also experiencing strong growth in consumer spending, with households in better financial health compared with other parts of the UK.
- Across the West Midlands, cities in the region are also seeing high rates of research and innovation growth and employment growth.
The LBPI will be updated each financial quarter, presenting a current and forward-looking view across each locality. Users will also be able to see where local areas have moved from one cluster to another, reflecting changes in the local business cycle.
Karl P Edge, head of KPMG Private Enterprise in the UK, said: “As the economy continues through a challenging period, there’s growing emphasis on local authorities to define their economic strategies and leverage profile of their business community.
“That’s why we’ve created the Local Business Pulse Index to help pinpoint the growth opportunities across England, Scotland, and Wales. From the data, we can see there are distinct hubs for job creation, use of technology when working remotely, and investment.
“While we’ve experienced significant economic challenges over the past few years, it’s encouraging to see high investment levels come out on top, reassurance that growth and confidence are headed in the right direction for local areas.
“The need to understand local economies is crucial in prioritising investment and informing wider policy and with this tool, we can start to map out where our priorities should lie.”
Professor John Gathergood, at the University of Nottingham School of Economics, said: “We are delighted to bring together the latest economic data, together with artificial intelligence technologies, to create this exciting new product with KPMG. It will support businesses and governments to help make better decisions about localities across Great Britain.”
