EXETER'S economy is forecast to grow more quickly than Plymouth, Bristol or the South West as a whole in 2012.

But uncertainty over the national and European outlook is likely to mean companies remain cautious about investing in new premises.

These were among the insights at a market review seminar hosted by the Exeter office of international property consultants Jones Lang LaSalle.

Andrew Burrell, the firm's head of forecasting, highlighted figures from Oxford Economics showing Exeter's GDP growth of just under two per cent in 2011 outperformed Bristol, Plymouth and the South West and UK averages. A similar differential in economic output is predicted this year.

Mr Burrell said the figures were explained by the balance of sectors in the local economies, with Exeter less reliant than Bristol on the struggling financial services sector. "For the South West as a whole, the mix of industries is very similar to the UK but performance has been slightly better thanks to healthy expansion in the region's manufacturing and construction," he said.

"For Exeter, the weaker financial and public sectors are still not doing well, but they account for much less of GDP so they exert less of a drag. The local economy is also benefiting from other industries – such as manufacturing, retail and transport – which are stronger than the regional or national performance. Overall, this translates into the higher GDP increases, though at under two per cent per annum these still remain slightly below par."

While predicting another tough year in 2012, Mr Burrell suggested a brighter second half of the year would follow a shallow recession.

The theme of the event, held at Exeter Racecourse, was Adapt to Survive. Trends identified included the continuing growth of online retail and shops being vacated as leases expire.

Charles Kislingbury, head of Jones Lang LaSalle's Exeter office, said a drive to save money on public sector property estates would bring opportunities for the South West, where the Government Property Unit is tasked with slashing annual running costs of £200 million on more than 300 buildings.

"The effect of central and local government rationalisation is starting to bite," he said.

Director Tim Western highlighted Exeter's buoyant hotels sector, with new developments totalling 700 bedrooms built in the last few years or currently in the planning system.