The West Midlands economy shrunk by around £9 billion as a result of coronavirus pandemic, according to a new study.
State of the Region 2020 lays out the full impact of the pandemic on the economy and communities of the West Midlands and suggests the former will not recover until 2022.
The report, which has been published by the West Midlands Combined Authority and partners, provides a stocktake of how the region has fared over the last 12 months and sets the challenges that need to be confronted.
The aim is to inform the Government, local authorities and businesses of the key challenges and where joint action needs to be targeted to drive a recovery.
The report has been written by the University of Birmingham’s West Midlands Regional Economic Development Institute and will be presented to the combined authority’s board on Friday.
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Initial baseline forecasts say the regional economy’s GVA shrunk by around nine per cent in 2020 from £106 billion to £97 billion and is not expected to regain its previous size until 2022.
But the academic research also found signs of encouragement.
Forecasting models show relatively strong regional growth in 2021 and latest forecasts have been revised upwards with the success of the vaccine rollout.
The report says the region has demonstrated amazing resilience in the face of the pandemic, through business innovation, redesign and adoption of technology which, along with support programmes, have enabled businesses to adapt, pivot and prosper.
Next year’s Commonwealth Games will also provide an opportunity to drive action to tackle the issues in the region’s hardest hit sectors, especially hospitality.
State of the Region 2020 says pre-pandemic levels of employment may not return until 2023 with the region’s unemployment claimant count almost doubling last year, hitting young people hardest.
New apprenticeships also fell by almost 19 per cent to 25,800.
West Midlands Mayor Andy Street said: “This report is open and honest and shows where the region stands after more than 12 months of upheaval and uncertainty.
“There is no question the pandemic has hit us exceptionally hard but we have to use this report as a call to action for the West Midlands.
“That’s why we’re pressing on with our practical plans to get the West Midlands back on track.
“We are in a difficult position right now but I want residents to know that we are utterly determined to get this region back on top once again and we have the plans to make that happen.”