Engineering plays an important role in West Midlands’ economic growth and contribution to the wider UK economy, but its success creates housing challenges that have sparked one of the largest brownfield development programmes ever launched in the UK.
The Black Country is home to 60% of UK automotive research and development (R&D), 20% of the nation‘s aerospace output, and contributes more than £1bn to the UK economy through construction technologies. 25% of the UK engineering workforce is in the Greater Birmingham & Solihull Local Enterprise Partnership area.
Recent news in the sector has included Jaguar Land Rover investing £450m in its Castle Bromwich plant to build the next generation of XF sports cars. It has also spent £1.5bn on its Solihull facility over five years.
China’s Changan Automobile (Chana), a fast-growing vehicle maker, has relocated the UK head office of its powertrain and R&D divisions to 24,000ft2 of space on long-term leases at Birmingham Business Park, Solihull. Chana is developing a world-class powertrain research centre, linking with local universities and creating jobs.
Birmingham will co-host the new National College for High Speed Rail, providing specialist vocational training to a generation of rail engineers working on the HS2 project and beyond. HS2 is expected to create up to 2,000 apprenticeship opportunities and will employ some 25,000 people during construction. Its support for wider economic growth could, some experts have forecast, lead to an additional 400,000 jobs.
Birmingham has the largest number of firms in the UK within advanced manufacturing, a very 21st century sector applying innovative technologies and methods to improve products or processes and keep them competitive in global markets.
HydraForce, which designs hydraulic cartridge valves for mobile and industrial equipment markets, has moved to its purpose-built, 120,000ft2 facility on the Advanced Manufacturing Hub (AMH) in Aston, Birmingham, and is creating or safeguarding more than 500 jobs.
The 20-hectare AMH, a joint initiative between Birmingham City Council and the UK government’s Homes and Communities Agency is an official Regional Investment site for buildings from 35,000ft2 to 155,000ft2. Occupiers engaged in manufacturing, light industrial activities and R&D need not apply for conventional planning permission. Planning consent can be issued in weeks at relatively minimal cost.
Guhring, a Birmingham-based precision toolmaker for engineering and medical industries, has been constructing a 55,000ft2 purpose-built factory at the AMH to co-locate its sales and service divisions with manufacturing and R&D from 2017. It aims to double its 75-strong workforce.
Engineering is seen as a regional strength to be developed within a strategy around which 11 LEPs across both the West Midlands and East Midlands are aiming to generate 300,000 new jobs and £34bn worth of additional growth for the UK by 2030. The LEPs and other stakeholders are pursuing these goals under the umbrella of the Midlands Engine initiative seeking to catalyse a world-leading regional economy.
The initiative’s ‘pitchbook’ showcases major investment opportunities to key markets such as China and the US. It estimates that these could together create 178,000 jobs, 32,000 new homes, and 57.9m ft2 of property space.
Success, current and anticipated, brings infrastructure challenges, none more so than demand for new homes, and nowhere more so than in the Black Country, where growth outstrips the regional average.
Local leaders have responded with Black Country Garden City, one of the UK’s most ambitious schemes to provide new homes to support economic growth and inward investment. Seeking £6bn in investment, it is to be built across some 31 urban areas on more than 1,500 hectares from Aldridge to West Bromwich.
The development is led by the Black Country LEP and the Homes and Communities Agency, with support from the UK Department for Communities and local authorities. It is planning 45,000 new homes to increase capacity, win more business investment and sustain economic renaissance. Construction is under way and due for completion by 2026. Regional leaders forecast that the initiative will have boosted the local economy by £18bn by then.
Black Country Garden City is also a response to unprecedented demand for housing triggered by record recent and current levels of business investment. House prices in Wolverhampton grew more than eight per cent last year, and its population is rising by more than five per cent annually.
It is also a tool to retain graduates from the 10 West Midlands-based universities that maintain a high calibre graduate skills base. There are 20 leading universities within a one-hour drive of Birmingham, which output 120,000 graduates annually.
Birmingham has a high graduate retention rate. It is also Europe’s ‘youngest’ major city, with under-25s comprising nearly 40% of the population. It also offers the cultural diversity that, for example, can help to attract creative industries. Pupils in Birmingham schools are from 87 different ethnic backgrounds and speak 108 different languages.
Why invest in the West Midlands?
Economy: Birmingham’s diverse and growing economy generated £23bn in gross value added (GVA) in 2015, the largest contribution of any UK regional city. The Greater Birmingham & Solihull Local Enterprise Partnership (GBSLEP) area contributed £42bn GVA, while the West Midlands economic region accounted for more than £114bn GVA.
Companies and people: Birmingham has more businesses (36,700) and employees (490,300) than any UK city apart from London. The Greater Birmingham area has 112,000 companies. The population of the West Midlands has increased by 330,000 in ten years. Employers have access to 4.3m people of working age within a hour’s drive of Birmingham city centre.
Enterprise: Birmingham had the highest number of business startups – more than 20,200 – of any UK regional city in 2015, when there were more than 42,500 start-ups in the West Midlands.
International: West Midlands is the third largest exporter among the UK’s official economic regions. 700 overseas-owned companies operate from Birmingham, more than in any other English regional city. There are 1,500 such companies in the GBSLEP bailiwick, which attracted more foreign direct investment projects (73) than any other LEP area in 2014/2015. These projects created nearly 4,700 new jobs. The area attracted even more (81) new FDI projects and created and safeguarded 5,176 jobs in 2015/16.
A destination: Birmingham has been drawing record numbers of visitors for leisure, business and tourism purposes. It welcomed 38.1m in 2015, more than 1m of them from abroad; its highest-ever annual tallies on both counts.
Sources: ONS, FAME database, StartUp Britain, Regional Observatory/UKTI, businessbirmingham.com