Northampton in top five for fastest economic growth but should expect a fall, Irwin-Mitchell report says

The research predicts yearly growth will fall by 5.5 percent by this time next year

Wednesday, 8th December 2021, 10:50 am

New research from business law firm Irwin Mitchell has found Northampton was the fifth fastest growing economy out of 50 in the UK, although it lags behind in employment growth.

The data was revealed in the firm's 'UK Powerhouse; Autumn /Winter 2021' report, which saw Northampton achieving a 8.3 percent growth year-on-year, as compared to the same time last year.

This is measured in gross value added (GVA), the value generated by any unit engaged in the production of goods and services.

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DVA is predicted to rise from £11,600 million this year to £11,900 next year

The only areas to do better were Southampton (9.2), Milton Keynes (9.0), Stoke on Trent (8.6) and Preston (8.5).

Given that last year, businesses and customers alike were still wrestling with lockdowns in the shadow of Covid-19, a distinct boost the year after everything reopens is no surprise.

But the explosion of demand for industries like transportation, as well as online shopping are believed to be major drivers in this rapid growth seen in certain areas.

Other major drivers included the construction and services sectors, which have seen increased demand nationally.

Northampton has also kept itself in the green in employment growth, managing a 0.5 percent increase despite the difficulties of Covid-19. This is predicted to rise to a further 0.9 percent by this time next year.

The Government's furlough scheme is cited as a major preserver of jobs over lockdown.

However, the firm also predicts the boost to growth will be short lived, with a comparably small 2.8 percent growth rate forecast for this time next year, bringing it down from fifth best to sixteenth.

Concerns cited in the report include; fears of new Covid-19 variants, fuel and food shortages, inflation squeezing home budgets, Brexit and a likely rise in the cost of borrowing which have led to a growing sense of 'pessimism'.

In order to continue to grow in what have been turbulent times at best, Irwin Mitchell say that innovation in business is key.

A promising area, given the Government's stated aim of increasing public research and development (R&D) spending.

The report optimistically refers to the £20bn in funding that is promised for UK businesses by 2024-25, with the aim of boosting the science and technology sectors.

While growth may slow down by this time next year, the fact Northampton's remains positive may yet be a good sign amidst an unpredictable pandemic and economy.