Businesses expect regional economic growth but see uneven investment across the UK
More than four in five UK businesses are confident in their regional economic growth in the next three years, with planning and investment in community and transport reported as the key drivers of future regional economic growth, but there is a divide in how businesses perceive public investment is distributed across the UK, according to new research from Lloyds.
Confidence was highest in the North East, where 90% of businesses expect regional economic growth, followed by the South East at 89% and the North West at 88%.
When businesses were asked about public investment in their region, 85% of London firms perceive their region receives its fair share. This falls to 37% of businesses surveyed in Yorkshire and the Humber and 38% for businesses in Wales. This compares to 64% of all businesses across the UK who perceive their region receives its fair share.
| Region | Agree – receives fair share of public investment | Disagree – receives fair share of public investment |
| London | 85% | 6% |
| South East | 81% | 6% |
| Northern Ireland | 71% | 29% |
| Scotland | 66% | 13% |
| North West | 64% | 15% |
| East of England | 62% | 10% |
| East Midlands | 54% | 14% |
| West Midlands | 50% | 16% |
| North East | 49% | 27% |
| South West | 49% | 24% |
| Wales | 38% | 19% |
| Yorkshire & Humber | 37% | 31% |
UK economic outperformance expectations highest in London, North West and South East
Meanwhile, 62% of businesses in London think it will outperform the UK economy in the next 12 months, the highest proportion surveyed. By comparison, only 28% of businesses in the East Midlands and South West believe their region will outperform the UK economy, followed by 31% in Scotland, 34% in Wales and 37% in the East of England.
Unlocking the next phase of regional growth
Despite these differences, businesses across the UK pointed to a clear set of drivers that could help covert confidence into regional growth:
- Supportive local planning 37%
- Investment in communities 36%
- Transport and logistics 36%
- Universities, innovation and research 35%
- Digital infrastructure 32%
Regional variation was also seen by driver, with some regions placing greater significance on one driver than others:
- Supportive local planning – highest at 48% in East Midlands
- Investment in communities – highest at 48% in West Midlands
- Transport and logistics – highest at 51% in Northern Ireland
- Universities, innovation and research – highest at 44% in Wales
- Digital infrastructure – highest at 46% in South East
Amanda Murphy, CEO for Lloyds Business and Commercial Banking, said: “Businesses across the UK are telling us they see opportunities to grow. Turning this ambition into action requires public and private investment working together to create the right environment for growth. Whether its investment in infrastructure, skills, innovation or research, businesses have a clear view of what they need locally to drive growth. Every region and nation has its own unique strengths and, by building on these, businesses will have the confidence to invest, create jobs and unlock their full potential.”