Mark Adair

Economic silver linings in the steel city

A study has found that attracting new foreign direct investment will be key to Sheffield’s long term economic outlook

A new report predicts a mixed economic picture for Sheffield by the end of 2023 with a small increase in economic output but stronger employment gains with over 8,000 newly filled jobs being created since Q4 2021.

The UK Powerhouse study, which has been produced by Irwin Mitchell and the Centre for Economics & Business Research (Cebr), analyses 50 of the largest local economies by employment and gross value added (GVA).

According to the study Sheffield saw a 6.1 per cent uptick for GVA at the end of Q4 2021, placing the city in 30th place. In terms of employment, Sheffield also ranked 30th with a year-on-year growth in employment of 1.9 per cent.

By the end of Q4 2023, the city is predicted to have fallen 10 places in the table, with a 1.5 per cent increase in economic output of £300m which takes the total size of the economy to £12.3bn.

However, according to UK Powerhouse, Sheffield will rise to 14th place for new jobs by the end of next year, based on a 1.4 per cent year-on-year increase. While the employment figures make for good reading, the city lags behind regional rivals like Leeds, a city up in 6th place for job creation, equating to over 19,000 new jobs created between Q4 2021 and Q4 2023.

The Yorkshire region as a whole is 5th in the regional league table when it comes to FDI projects. While the report highlights the importance for all northern cities to improve in attracting new FDI, others with established credentials in core areas are likely to have an advantage over Sheffield in the short term.

Bryan Bletso, partner and Head of International at Irwin Mitchell, said: “Sheffield’s performance in this report is not stellar. However, to jump from 30th to 14th for job creation by the end of 2023 given continued reliance on a traditional manufacturing base is a silver lining for the Steel City as it emerges from a challenging few years following lockdown.

“The majority of the UK’s top 10 fastest growing cities by the end of 2023 are predicted to be in the South and East and it is no coincidence that these regions have a much better record of attracting FDI.

“While Yorkshire’s 5th place in the FDI table looks bleak, other northern cities have shown it is possible with the right policies and support to attract more of this business so essential for growth.”

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