Britain to benefit from productivity boom over next five years
Beyond the City report shows cities such as Manchester and Birmingham growing faster than global business hubs Paris and Tokyo
Over the next five years the UK will benefit from a substantial increase in productivity and disposable income, according to Beyond the City – a new report commissioned by the International Festival for Business (IFB).
Despite relatively slow economic activity and disposable income growth across 2010 to 2015, the report includes insights from economic forecasters at Oxford Economics with predictions that both indicators will improve “significantly” by 2020.
Productivity is expected to increase by 10.7%, which will in turn cause personal disposable incomes to rise by a total of 12.4%. Over the last five years productivity growth was 0.6% per year – 3.2% in total – and disposable income rose by 0.5% per year, totaling 2.7%.
The study also predicted that an estimated 1.3 million jobs will have been created by 2020 due to improvements in international competitiveness and exports.
Between 2010 and 2015, Manchester – ranked top in the Startup Cities Index – saw the biggest growth in employment overall with 68,154 new jobs, followed by Central Bedfordshire (21,143) and Watford (14,493). Watford is expected to see the biggest growth in job creation going forward, rising by almost 9% by 2020.
Professional services will continue to be a major employer over the next five years, accounting for 330,000 jobs created – again with Manchester and Watford set to see the most significant growth.
Manufacturing has also seen rapid employment growth in many local economies over the last five years and the reports expects productivity to rise by 15.5% from 2015 to 2020. This will contribute to a raise in the UK’s international competitiveness, with the value of manufacturing exports increasing by 35%.
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On a global stage, Manchester, Liverpool and Birmingham were found to have outperformed Paris and Tokyo in terms of productivity over the last five years with Manchester expected to match New York and Sydney for growth by 2020.
Max Steinberg, chair of the International Festival for Business, said of the report: “It’s clear the economic recovery is about to turn another corner – with rising productivity driving a surge in disposable incomes and in our international competitiveness.
“London is central to our economy, but this report makes it clear that Britain has productive and creative hotspots beyond the City that will make significant contributions to the country’s economy over the next five years.
“At next year’s IFB festival we will celebrate Britain’s collective economic strengths, showcasing our capabilities to the world for three weeks of events and deal making, and this report makes it clear we have a great deal to offer.”