Growth Due To City's Dominant Transportation And Storage Industry
Southampton is predicted to have the fastest growing economy in the UK by the end of this year however according to the latest business report by national law firm Irwin Mitchell, the next 12 months will see the city struggle to maintain this leading position.
The UK Powerhouse study, which has been produced by the Centre for Economics & Business Research (Cebr), analyses 50 of the largest local economies by employment and GVA growth.
In the latest report, Southampton is predicted to see its economy grow by an impressive 9.2% in the 12 months to Q4 2021.
The report attributes much of the growth due to Southampton’s dominant transportation and storage industry.
It highlights that during and immediately after lockdown, the city benefitted as consumption shifted from retail shops towards online shopping, shipping and courier services became more demanded. Although UK exports to EU countries plummeted in January 2021, there has been a recovery over the course of 2021 whilst imports from non-EU countries in 2021 are at a higher level than they were in 2020.
Although the report expects Southampton’s economy to grow next year, it is predicted to be at a much slower rate 2.8% moving it this from first place to 18th in the league table.
Hannah Clipston, partner at Irwin Mitchell, said: “The UK’s economy has undergone significant change over the last two years and this report highlights that the recovery is unlikely to be linear or even uniform.”
Here the study reveals that the South West and the South East have the largest share of businesses engaged in innovative activity. According to the study, 41% of businesses in the South West are defined as innovative compared to 34% in Northern Ireland.
The most popular driver for innovation is improving the quality of good and services. Interestingly, only a quarter of firms in the South East were innovating in response to environmental concerns and a desire to reduce their carbon footprint. The proportion was even lower in London and the South West where the figure was just 20%.
Hannah added: “Businesses have been incredibly resilient over the last couple of years and have faced many disruptors including Covid, labour shortages, supply chain issues and high fuel costs.
“Our latest study recommends that irrespective of the sector they’re in, organisations should be adopting technology more quickly and adapting to the UK’s new status after Brexit.
“All of this will require a shift in approach and for innovation to be celebrated and nurtured more than it is currently. It’s vital that businesses are encouraged to follow this path and receive the right level of support in order to help them succeed.”