Cambridge’s economy continues to lead the way


30-09-2019
Irwin Mitchell Powerhouse_Five fastest and slowest growing cities

Cambridge retained its leading position for fast economic growth after a new report said it came top for job creation in the second quarter of 2019.

According to the UK Powerhouse report by Irwin Mitchell and the Centre for Economic & Business Research (Cebr), Cambridge’s employment levels grew year on year growth by 2.2% in Q2 2019, with headcount rising to 136,400.

It was also in second place for GVA* growth, registering 1.9% year on growth in the same period.

The report said that the city in the East of England is home to many large companies which support employment. Examples include the globally competitive pharmaceutical company AstraZeneca Plc as well as aerospace & defence, property and ventures company Marshall Group.

Looking further ahead, Cambridge’s economy is predicted to grow by 20.1% over the next decade with employment levels expected to rise by almost a quarter (23.9%).

This quarterly version of the report included a ‘Brexit Disruption Index’ to analyse which industrial sectors will be affected most after the UK leaves the EU. It bases its predictions by analysing the change to three key indicators - the free movement of labour, tariffs on exports to the EU and investment into the UK from the EU – and assumes that a deal will eventually be agreed.

Neil Whiteley, Regional Managing Partner with Irwin Mitchell’s Cambridge office stated: “Once again, Cambridge has emerged strongly in the analysis reflecting its vibrant economy and the strength of its creative talent. However this anticipated growth also highlights the vital importance of investment in the infrastructure throughout the region to support housing, transport and the environment which are key elements to complement a growing economy”

According to the study, the manufacturing industry will face more disruption as a result of Brexit than any other sector, according to the latest UK Powerhouse study.

Manufacturing has an index score of 90% and the report says that even if a deal is secured the sector will contract by 0.8% in 2020, down from a fall of 0.5% this year.

*Gross Value  Added

View the report online>>>

Methodology

All Powerhouse forecasts in this report utilise Cebr’s central Brexit scenario. Cebr’s central forecasts are based on the assumption that the UK will reach an agreement with the EU and that a transitional arrangement will be put in place. On the immigration policy, we rely on the lower immigration population estimates assuming that a visa system will be implemented for EU nationals, but that the requirements (e.g. the minimum salary, the NHS surcharge payment, the application fees, etc.) would be more relaxed than they currently are for non-EU nationals requiring a visa.

The report’s Disruption Index is based on three key ways in which industries in the UK will be affected by Brexit. Each of these has been measured for the 18 key sectors of the UK economy.

  1. The share of workers in each sector who are non-UK EU nationals – this is important to consider because it is likely that free movement of labour between the UK and the EU will be restricted after Brexit.
  2. Value of goods exports to the EU by sector – UK businesses could be subject to tariffs on exports to the EU after Brexit.
  3. Foreign direct investment from the EU by sector – Many businesses currently receive investment from the EU which may be lost once the UK is no longer in the EU.

Each of the indicators was scored according to the likelihood that Brexit will disrupt businesses in each sector, where 100% is the sector that will see the most disruption, compared to the other sectors, and 0% indicates the least disruption.

About Irwin Mitchell

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Irwin Mitchell Scotland LLP is a separate Scottish legal practice regulated by the Law Society of Scotland and has an office in Glasgow.

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