Best UK performer
Edinburgh economy least impacted by Covid
Edinburgh’s sectoral mix has been an advantage (pic: Terry Murden)
Edinburgh’s economy has resisted the impact of the Covid pandemic better than any other city in the UK, according to new research.
Closed and restricted business activity is expected to result in its economy shrinking by 9.1% last year.
This was lower than other cities because of its sectoral mix and relatively low rate of infections.
Glasgow has declined by an estimated 10.4%, making it the hardest hit Scottish city against an average average annual economic shrinkage in Scotland of 9.7%. Both are better than the UK’s 11% average rate of decline.
Edinburgh’s ability to withstand the virus will, however, see it recover more slowly, with growth at 3.9% this year compared to Aberdeen (4.1%) and Glasgow (4.6%).
The Demos-PwC Good Growth for Cities Index ranks 42 of the UK’s largest cities based on the public’s assessment of 10 key economic wellbeing factors, including jobs, health, income and skills, as well as work-life balance, house affordability, travel-to-work times, income equality, environment and business start-ups.
PwC’s GVA analysis took into account a city’s sectoral make-up, the impact of the use of the furlough scheme to protect jobs, and rates of Universal Credit claims, COVID-19 infection and mobility rates to project GVA growth rates for 2020 and 2021.
The report finds that UK cities and towns hardest hit by the economic fallout from the pandemic are likely to make the fastest recovery, but are still expected to be worse off than at the beginning of the pandemic compared to more resilient places.
While there will be bounce back for hard-hit cities, recovery will not necessarily instigate an increase in economic activity – leaving low-performing cities worse off than at the beginning of the pandemic compared to more resilient places.
Stewart Wilson, government and health industries leader at PwC Scotland, said: “The pandemic has shone a spotlight on existing economic and social inequalities.
“This reinforces the view that when the post-pandemic recovery begins in earnest, we must look beyond GDP and focus our collective efforts on tackling issues that really matter to the public, and their local economies, such as skilling, sustainable income and health and wellbeing.
“We need an approach which takes into account the strengths and needs of individual towns and cities to build more resilience and drive a fair recovery across the UK.”