PwC's Good Growth Barometer measures household spending power - income remaining after housing costs and taxes, adjusted for household size - alongside quality-of-life factors including healthcare access, green space, housing and safety.
Annual household spending power in the West Midlands stands at £22,552, £819 below the UK average, with the East Midlands at £22,758, £618 below average.
Gross household incomes in the West and East Midlands are 4.2 per cent and 5.7 per cent below the national average respectively, though lower housing costs and smaller households narrow the gap.
The picture worsens for the West Midlands when wider quality-of-life outcomes are considered.
PwC's Public Value Score, which combines household spending power with social and environmental outcomes, gives the West Midlands a score of £1,610 - the second lowest of any English region.
The East Midlands fares better, ranking fifth among the 11 GB regions and devolved nations with a score of £2,052.
The West Midlands' Social Value Score of minus £269 is among the lowest in the country, with financial resilience and health identified as the largest constraints, alongside a sizeable negative contribution from housing.
Birmingham was highlighted as a particular pressure point, with below-average mental health outcomes and residents struggling to keep up with bills.
Jobs provided the region's most positive contribution, with Herefordshire, Warwickshire, Staffordshire and Stoke-on-Trent all scoring above the national average.
The East Midlands, by contrast, recorded a modestly positive Social Value Score of £156, with financial resilience the largest positive driver, supported by above-average results in health, jobs, social connectivity and housing.
Performance varied within the region - Leicestershire scored well on both spending power and Public Value, while Nottingham and Leicester underperformed on both measures.
Leicester was among the ten lowest-scoring local authorities in Great Britain for household spending power, at £18,060 annually.
Alex Hudson, market senior partner at PwC, said: “The findings underline that there is no single, simple Midlands growth story. Both the East and West Midlands face a household spending power gap, but the wider factors shaping people's lives differ considerably between places.
“The East Midlands demonstrates how strengths in health, jobs and financial resilience can support wider prosperity even where incomes remain under pressure. In the West Midlands, the evidence points to a need to connect economic growth more closely with action on financial security, mental health and housing.
“Devolution creates an opportunity to respond more precisely to those local conditions. Growth will make the greatest difference when investment is targeted not only at creating economic opportunity but also ensuring this is translated and reaches the right people and communities.”
Nationally, the research highlights a significant North-South divide in household spending power, with every northern region of England falling below the GB average. Households in the North East have spending power 6.6 per cent below the UK average, while those in the South East sit 9 per cent above average.
London has the strongest gross household income at £68,856, though higher housing costs and larger households reduce its spending power advantage to just 8.1 per cent above the national average.
The research also found significant variation within regions and cities, including London, where spending power can differ by tens of thousands of pounds between neighbouring boroughs.
Rachel Taylor, Government and Health Industries leader at PwC, said: “The research shows just how differently prosperity is experienced across the UK, with stark variations not only between regions but on each other's doorstep.
“The better we understand what drives those differences, the more precisely we can tackle them.”
Overall, the research found that for around 46 per cent of the UK population, economic growth is translating less effectively into a better quality of life.
