Hard, physical graft.
Manufacturing, construction, marine, offshore.
That’s the popular perception of the North East’s working life from those outside the region.
But while it’s true that our traditional strengths in making, building and transporting things are still very much alive, there’s a sector whose growth has been particularly marked over the last decade, but not particularly remarked upon: the finance and professional services sector.
Recent research has found that the North East’s finance and professional services industry has grown by 12% in the last 10 years.
The figure is contained in a report released by membership group TheCityUK, which represents the interests of professional services firms, that looks at the industry's output between 2001 and 2021.
The report suggests the North East alone generated economic output of £3.6bn – representing 6.3% of the region’s total – and the group says continued expansion of Government infrastructure across the UK could instigate further growth.
Currently some 56,000 people – 5% of the region’s total workforce – are employed in the finance and professional services sector with Newcastle and Sunderland singled out as particularly strong regional centres.
The report flags up the region’s strengths in banking, mortgage lending, legal services and management consulting services, including regional heavyweights in law and finance and specialist consultancies supporting key areas of opportunity like offshore energy.
Commenting on the report, Jerry Arneja, TheCityUK chair in the North East, and area director, North East & Humber Business Banking, HSBC UK, said: “It is clear that not only is the financial and related professional services industry an important contributor to our national economy, but it also delivers real opportunity and prosperity for the North East.
“The growth in industry employment in the North East over the past decade reflects the significant investment made by firms and their commitment to building a strong pipeline of talent.”
So what has helped to bring this growth about – and how can it be continued?
The report earmarks a number of important factors including:
While the report notes the spread of national financial and professional services to the region, such as the presence in Newcastle of all of the ‘Big 4’ accountancy firms, it should not be neglected how much of the current growth in the sector across the region is due to home-grown businesses.
For example, many of the region’s law firms have not only expanded their presence in the North East, they have also grown to set up offices in other parts of the North, other regions in the UK and other parts of the world.
Then there is the continuing success story of Sage Group, the FTSE 100 company which started life in a Newcastle pub and is now one of the leading financial and business software providers on the planet – with its roots and headquarters still very much in the North East.
In other parts of the financial and professional services sector, such as marine insurance, the North East’s specialist skills have seen the region become a global centre of expertise with satellite offices across the globe.
The region is also a great place for innovation in the industry – witness the establishment of Middlesbrough-based GB Bank last year with its focus on supporting the SME property sector. At Cool Blue, we’re very proud to be working with the fantastic team at GB Bank on a range of different projects as one of the UK’s newest banks delivers on its promise of helping to build communities across the country.
And the North East’s growing reputation for digital and technological innovation has seen a number of fintech companies set up in the region and bring their new thinking and new ideas to the forefront, so much so that we are the only region in the North of England to have a dedicated fintech cluster group.
So it’s clear that the region has a vibrant present and a potentially even more exciting future – but what needs to happen to make our financial and professional services sector keep growing?
TheCityUK report focuses on three main areas:
There’s certainly a lot to digest here, but it is heartening to see how the financial and professional services sector is already thriving in the North East and its potential for even further success in the future.
Developments like Bank House in Newcastle (shown here) are set to help continue that success with tenants including Barclays, Lycetts and DAC Beachcroft already confirmed for the office complex on Pilgrim Street.
Riverside Sunderland and Middlesbrough’s Centre Square are also proving popular locations for the region’s growing finance and professional services sector.
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