Midlands on brink of investment surge if UK achieves Brexit certainty, says leading economist

The West Midlands has, so far, escaped much of the initial economic impact of Brexit, which hit the financial economy hardest, but uncertainty has lingered now for so long that non-financial regional economies are starting to feel the effects.  
  

At a breakfast briefing hosted today by global real estate advisor Colliers International for local development stakeholders, the company’s Chief Economist Dr Walter Boettcher said that “Brexit has meant that the UK missed out on a cyclical upside in 2017 and 2018 when the European economy was strengthening, but now given ongoing lack of business certainty, we are beginning to see the damage of under-performance both to short-term economic performance, but also to long-term economic prospects.”

Boettcher continued: “Even the West Midlands, which has been among the best performing regions since the vote to leave, is beginning to feel the impact. The latest Purchasing Managers Index (PMI) suggest a definite slowing in the region as business investment stagnates.”

“Should Brexit certainty come, irrespective of the terms of the deal, the West Midlands along with the UK as a whole should expect to see a substantial surge in business investment which may transform what might otherwise be a very lacklustre year for the economy.”

“For Birmingham and the West Midlands, the good news is that regional devolution and development agenda has created what looks to be an unstoppable momentum especially given the interest by cross border investors and occupiers,” Boettcher added. 

“Brexit certainty would give this momentum a further decisive boost. In some ways, central government’s preoccupation with Brexit has meant that several metro-mayor regions have been left to get on with business without undue interference. Equally, greater support from central government would be welcome, especially as local organisation has strengthened.”

James Cubitt, Head of Colliers’ Birmingham office, agreed that, from a local perspective, Birmingham’s fundamentals still add up: “The property supply/demand conditions remain favourable for further development and this is attracting a wide range of domestic and international investors.”

Cubitt added: “‘It’s remarkable the depth of interest we are seeing from a wide range of investors. There is a lot of cash to be deployed but most recently we have seen an increasing hesitancy to push potential deals across the line in the absence of the long-term security that a political settlement with the EU would bring.”