Yorkshire set to reach pre-Covid levels of output by first quarter of 2022, says KPMG
Yorkshire should benefit from investment growth this year due to the strength of its industrial sector, according to the latest analysis from KPMG’s UK Economic Outlook.
The region is expected to see 5.8 per cent growth in 2021 followed by 5.2 per cent growth in 2022, reaching pre-Covid levels of output by in the first quarter of 2022, in line with the UK forecast.
While tourism in Yorkshire could see a boost from the increase in staycation holidays this summer, the post-pandemic economy is expected to be more reliant on the growing financial, professional and business services in the region.
A spokesman said: "Yorkshire, along with all UK regions and nations, saw strong increases in house prices despite the severe economic shock of the pandemic.
"The strongest rises took place after the introduction of the “stamp duty holiday” in the 2020 Summer Statement. However, analysis suggests the pace of house price rises is unlikely to be sustained in the medium term, due to the reversal of the cut to stamp duty in the next six months and changes in lifestyle preferences.
"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."
Euan West, office senior partner for KPMG in Leeds, said: “The expected recovery across Yorkshire and the Humber and overall investment growth in the region is what we have been hoping for since the start of the pandemic. We have great businesses across Yorkshire who are committed to the region and we hope to see them grow as the Government pursues its levelling up agenda, attracting inward investment.”
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 UK economy this summer, according to KPMG.
A spokesman said: "This will see GDP grow by 6.6% (up from 4.6% forecast in March) in 2021 and 5.4% in 2022, allowing the economy to reach its pre-Covid level by the first quarter of next year."