Edinburgh is the UK city least impacted economically by the COVID-19 pandemic,while Glasgow is the hardest hit city in Scotland.
The latest Demos-PwC Good Growth for Cities report suggests the Scottish capital is expected to see its economy shrink by minus 9.1% in 2020, a less severe impact than in any other UK city, due to its sectoral mix and relatively low case rate.
In Glasgow, the economic decline in 2020 is expected to be minus 10.4%. By contrast, the average annual economic growth rate for cities in Scotland is minus 9.7% in 2020, better than the UK average rate of minus 11.0%.
The economic recovery profiles north and south of the Border are more similar, with Aberdeen’s economy predicted to grow by 4.1% this year, and Glasgow by 4.6%. With 3.9% growth forecast, Edinburgh will be one of the slowest cities to recover.
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.
The Good Growth for Cities report calls for the UK’s recovery to look beyond national GDP and double-down on efforts to address the individual challenges facing towns and cities to level-up inequalities.Analysis is based on the ‘Gross Value Add’ (GVA) of each local area, reflecting the make-up of local economies and the prevalence of different industries.
The Good Growth for Cities research highlights that addressing structural issues – such as improving local skills, encouraging new business development and addressing local environmental challenges – will enable cities and towns to achieve longer-term good growth than traditional economic measures.
Stewart Wilson, government and health industries leader at PwC Scotland, said: “The latest Good Growth for Cities report examines a country clearly facing an enormous challenge, which has impacted the health and the economies of our towns and cities like nothing else in recent memory.
“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.”