Liverpool’s economy set to surge in 2022

Date posted:
Tue 25 January 2022

According to the latest research from PL Member Avison Young, optimism is high for Liverpool’s continued Covid-recovery in 2022, with the city forecasted to see GVA growth of nearly 6%, compared to an average of just 0.6% before the pandemic. This will be driven by the rebound in the accommodation, food, arts and entertainment and education sectors.

The outlook for employment in Liverpool is also positive, with 6,000 jobs expected to be added during the course of the year, bringing the number in employment to 286,000 – a record for the city. Over 1,800 of these roles are forecast to be office-type jobs, while accommodation and food services is predicted to see around 1,000 new posts created.

Much of the positivity in the city is centred around the work going on in the Knowledge Quarter, building on Liverpool’s global leading strengths in health and life sciences. There is a significant amount of high-profile demand from quasi-office occupiers, set to capitalise on The Pandemic Institute’s commitment to the city during 2021, in addition to the Royal College of Physicians also moving into The Spine. Further office and lab space at Paddington Village is earmarked with HEMISPHERE, the first net zero carbon office building in the city, set to commence on site later this summer. The building will feature 116,000 sq ft of grade A office space for health, education, science and tech occupiers.

Upper Central, the new Littlewoods TV and film hub, as well as £250 million of new transport and road infrastructure, will also bring significant investment into Liverpool. At the other side of the city, the new Everton stadium in the North Docks is igniting further regeneration and helping to accelerate the delivery of Liverpool Waters.

Liverpool has a reputation as an excellent shopping destination, with a larger retail offering than other comparable cities. Whilst vacancy currently stands at upwards of 15% across the city centre, Liverpool One continues to attract a range of new entrants to the city and average rents are expected to stabilise during the course of 2022 as the retail and leisure offer continues to diversify. In towns across the city region, significant repurposing of retail space is expected to continue, with Knowsley, St Helens, Wirral and Sefton all seeking to transform their shopping centre offers.

The transport and storage sector is expected to see output growth of circa 9%, which is its highest growth for over 20 years. The strength in this sector is driving Liverpool’s industrial market, which has experienced significant reduction in available stock whilst demand has soared, leading to rises in rents and land values. Liverpool’s freeport status will continue to drive new sources of occupier demand for a port which has already helped facilitate the city’s handling of approximately 45% of the country's trade with North America.

Another sector that was booming in 2021 and is set to have another strong year, is the residential market. Liverpool saw exceptionally strong house price growth in 2021, at 17.9%, it was well ahead of the national average. This is partly driven by Liverpool’s relative position in the housing market compared to the wider country, particularly southern locations. The city benefits from relatively good affordability, enabling buyers to put upward pressure on pricing without being too financially stretched, and this will help it to continue its strong performance in 2022.

Stephen Cowperthwaite, PL Board member and regional managing director and principal at Avison Young, said: “It is incredibly reassuring to see that the data backs up the more intangible feelings of optimism across the region. Like any city, Liverpool had its challenges in 2021 as it navigated its Covid response and recovery, but it has demonstrated its strength in health and life sciences. Loss of UNESCO status, whilst disappointing, is merely the loss of a label that has constrained development of the city. There are so many development and investment opportunities right across the region, as well as sustainable repurposing of existing stock, that make it an exciting period brimming with opportunity.

“A theme that will be present across all sectors in 2022 is ESG and we hope that the more it is discussed, it will help to generate positive actions across the real estate sector that benefit our environment, communities and the city’s economy. Liverpool is well positioned to take the lead on the ESG agenda, and it is a topic that we will be exploring at our Liverpool 2022 Forecast webinar next month and throughout the year with our industry partners, peers and clients.”

For more detail on each of the sectors and to hear discussion from key industry leaders on some of the trends that are set to impact the city this year, sign up to the Avison Young Liverpool 2022 Forecast webinar on 1st February, here.