Newcastle economy gets POSITIVE forecast for 2022 after year of regression

A KPMG spokesperson said: “It’s my hope that we can kick start a post-pandemic growth.”

After a rocky festive period riddled with Omicron Covid-19 cases, Newcastle is once again bouncing back from the setback.

New analysis by KPMG UK shows that the GDP in the North East of England is projected to grow by 4.5% this year, despite all that the region has faced in recent times.

The analysis means that the North East will return to its pre-Covid levels of output.

GDP is Gross Domestic Product, meaning "a monetary measure of the market value of all the final goods and services produced in a specific time period".

According to KPMG’s UK Regional Economic Outlook, the North East economy shrank by more than 10% in 2020 and the GDP of the region is still over 2% below its pre-pandemic level.

The North East’s recovery has been constrained by the supply chain disruptions affecting the automotive sector, and the latest PMI data suggests a contraction in activity in December 2021.

Also impacting the local economy are the challenges in the labour market in the region.

The North East has the highest unemployment rate and second-highest inactivity rate, while pay growth has been lagging the rest of the UK despite the strongest growth in vacancies.

It’s been a tough couple of years for the Tyneside economy (Image: Getty Images)

However, with the GDP set to grow by 4.5% in 2022, this year should see an upturn in fortunes.

Ian Beaumont, Newcastle office senior partner at KPMG UK, said: “Last year we saw great investment in the North East and a strong signal from the Government and businesses that they were committed to the region through announcements such as the establishment of the UK’s largest Freeport in Teesside and the UK’s first battery gigaplant factory in Northumberland.

"We must work together as a region to continue to attract investment to the North East as we look to not only bounce back from the pandemic but level up.

“Our latest estimates are welcome news, especially for businesses in retail, travel and hospitality who have been the hardest hit in recent months.

"While there are signs of optimism for some, there’s no doubt that 2022 will be another challenging year for certain sectors.

"It’s my hope that we can kick start a post-pandemic growth, and make sure that businesses in the North East can focus on long term growth, rather than survival.”