As Scottish economy slows
Cities to provide backbone of economic growth
Edinburgh will be Scotland’s fastest growing city while a further 4,000 jobs are expected to be lost in Aberdeen, according to a city-by-city forecast.
Information and communications will be a major driver of growth in most cities.
However, the Scottish economy will continue to grow more slowly than the UK average over the next couple of years, according to the EY Scottish Item forecast.
The report, published today, predicts Scottish output to grow by 0.7% this year and by 0.4% in 2017.
This compares with UK GDP growth rates of 1.9% and 0.8% respectively. Modest growth is expected to return from 2018.
Mark Harvey, EY senior partner for Scotland, said: “None of the UK’s nations, regions or cities will be immune to slower economic growth over the next three years but there will be significant variations across the country indicating there is more work to be done in rebalancing the economy.
“In a slower growing economy it will be harder to achieve more economic balance, not only on a UK level but across Scotland too. Although we can see pockets of growth in Scottish cities, little progress is likely to be made to increase these further and expand the output of the weaker cities in the short-term.
“UK and Scottish policy must be designed to complement local policy through targeted initiatives to support trade, deliver infrastructure, invest in skills and support growth in key sectors.”
Total employment predicted to fall by 1.6% in 2016 but unemployment in the city has only risen marginally since the summer
Over the period 2016 to 2019, 4,000 jobs are expected to be lost with an estimated 3,000 already gone from the mining and extraction sector in 2016.
GVA growth in Aberdeen (0.8%) is forecast to fall short of both Scotland (1.0%) and the UK (1.5%) in 2016-2019
Modest job losses across sectors contributing towards total employment predicted to fall by 0.3% in 2016
1,500 net job losses expected by 2019
Unemployment fell by 0.1 percentage points
Annual GVA growth to average 0.6% between 2016 and 2019
The city’s growing presence in the digital economy to make information and communications the fastest growing sector
Large fall in financial services employment largely offset by significant net job creation in the professional, scientific & technical services sector in 2016
Modest pace of employment growth predicted – 0.3% a year during 2016 to 2019
To be Scotland’s top performing city with GVA growth for 2016-2019 to average 1.6% a year
Total employment in 2016 has increased by 0.1%
Job gains concentrated in the professional, scientific & technical services sector, with an additional 2,600 jobs in the city in 2016
Employment to remain flat during 2016-2019
GVA growth to outpace Scotland with an annual rate of 1.3%
Fastest growing sector is likely to be information and communications, averaging 3.1% growth per year
Employment estimated at 0.6% higher in 2016 than a year earlier – above the likely performance of Scotland but below the UK average.
Jobs growth largely driven by the professional, scientific & technical services sector which is expected to have created 200 jobs, net, in the city through 2016.
Unemployment decreased by 0.1 percentage points
GVA expected to grow, averaging in our forecast 0.9% per year between 2016 and 2019, although employment due to decline by an annual rate of 0.5% by 2019
Fastest growing sector to be information and communications growing by 3.4% per year, reflecting wider national trends
Employment within Perth and Kinross expected to increase by 1.2% in 2016, which is above the likely performance of both Scotland and the UK. Underpinned by net job creation within professional, scientific & technical activities
Over the period 2016-2019, employment in Perth & Kinross is forecast to decline by 0.3% a year. Job losses are likely in public services, but also in the local manufacturing and financial services sectors
GVA growth is forecast to average 1.1% between 2016 and 2019, which is marginally above the Scottish average of 1.0%
Professional, scientific & technical and information and communications are expected to enjoy the fastest rates of output growth over the period
Employment likely to increase by 0.7% in 2016, above the estimated performance in Scotland, but below the UK average
Jobs growth in 2016 is largely driven by the professional, scientific & technical services sector which we estimate has created 300 jobs, net of any losses, through the year
During 2016-2019, employment is forecast to fall by 0.2% per year. Job losses in public services, manufacturing and wholesale & retail are expected
GVA growth is forecast to average 1.0% per year between 2016 and 2019, which is similar to the rate expected across Scotland
In line with the national outlook, the information and communications and professional, scientific & technical sectors should enjoy the fastest rates of growth