State of the Region 2020 Full Report

Some of the places hardest hit initially may not be the same places as those that struggle over the long run. This is because the initial economic hit is driven by sector concentration within local areas rather than underlying factors that support local resilience to economic shocks that we define as a high level of skills, low unemployment or a speedy recovery from a previous recession. The West Midlands is projected to be hard hit initially (with only the East Midlands expected to suffer a greater decrease in GVA in 2020 Q2). This reflects the preponderance of local authorities in the Midlands with a larger than average manufacturing sector, and also a sizeable construction sector. Analysis by the Centre for Progressive Policy shows that treating all local authorities as being of equal importance economically (which is not realistic given variations in the size of local authorities in the vulnerable, moderate and resilient categories), after five years the West Midlands is expected to see an average 9.2% decrease in average GVA relative to the trend expected in the absence of the Covid-19 crisis. This is a greater decrease than the UK average, but slightly less than the average decreases expected for the North West (-9.5%), Yorkshire & the Humber (-10.5%), Northern Ireland (-11.6%) and the North East (-11.7%). 

Relative to other regions, the West Midlands has a similar share of local authorities in the vulnerable category. However, the vulnerable category includes many of the large local authorities: Birmingham and the Black Country. The West Midlands has a greater than national average share of local authorities in the moderate category and a smaller than average share in the resilient category.

Other large regional cities in the UK are categorised as follows:

• Vulnerable: Birmingham, Manchester, Nottingham, Glasgow, Belfast
• Moderate: Leeds, Newcastle, Sheffield, Cardiff
• Resilient: Bristol, Liverpool

In the West Midlands, only Coventry and Solihull are in the moderate category, with the remainder categorised as vulnerable.