THE rise in staycations over the summer meant Brighton was able to withstand a severe blow to its economy, compared with other places.

According to a new report by Irwin Mitchell and the Centre for Economic and Business Research (Cebr), Brighton and Hove saw the third smallest annual contraction in economic output of the 46 UK Powerhouse cities in the third quarter of this year.

The city saw a 4.7 per cent decline in the employment rate over the same period and the value of goods and services produced in the city (GVA) was down by 7.4 per cent.

The Argus:

Other places saw a stronger contraction, such as Doncaster, where GVA was down by 11.7 per cent, and Milton Keynes, where it was down by 11.8 per cent.

Reading suffered the smallest reduction in economic growth, at -6.8 per cent, while Edinburgh was second on -7.0 per cent.

Brighton businesses were able to benefit from tourism and people taking staycations in the city over the summer, as the economy opened up following the first nationwide lockdown, the report states.

The Argus:

However, visitor numbers have fallen in the colder months and amid the November lockdown, and the economic forecast for 2021 is uncertain.

By the second quarter of next year, the city is projected to have fallen from the top three cities to sixth bottom, with a year-on-year GVA growth of 19.8 per cent.

This is below the national average, according to the report.

Employment is predicted to improve from -4.7 per cent to -2.2 per cent.

Looking to the end of next year, Brighton’s annual GVA growth is forecast to have improved, on 6.7 per cent, but year-on-year employment is still at the lower end of UK cities, on 3.4 per cent growth by the fourth quarter.

The Argus:

Vicky Brackett, chief executive of Irwin Mitchell’s Business Legal Services division, said: “Given that Brighton saw one of the smallest economic contractions of the UK Powerhouse cities by the end of the third quarter of this year, it’s not surprising figures projected for 2021 don’t maintain this level of performance.

“The city was helped when tourists visited this summer rather than go abroad and this is not likely to see a repeat until the warmer months return and the UK enters a ‘new normal’.

“The Powerhouse report projects that by mid-2021, a vaccine will have been distributed that will allow the UK economy to recover and see a return to consumer spending and this will be key to the recovery of Brighton and other seaside towns in the year ahead.

“In Brighton and elsewhere, the services sector was a major contributor to the third quarter recovery this year, with accommodation and food service sectors all recording strong growth, assisted by staycations, pent up consumer frustration and the ‘Eat Out to Help Out’ scheme.

“The hope will be that the services sectors in towns like Brighton have been able to weather the coronavirus crisis sufficiently to take advantage of better days once a vaccine is widely distributed among the population.”