Scottish cities to avoid worst impact of economic downturn in pandemic


SCOTTISH cities are likely to avoid the worst impact of economic downturn from the pandemic according to a new report.

The report outlines that Edinburgh is the UK city least impacted by the pandemic with other Scottish cities in a similar situation

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.

A picture of Edinburgh - Scottish News
(Photo by Peter Cordes on Unsplash) Edinburgh is said to be least impacted economically but its recovery will still be slow

Edinburgh is expected to see its economy shrink by -9.1% in 2020, a less severe impact than in any other UK city, due to its sectoral mix and relatively low case rate.

The latest Demos-PwC Good Growth for Cities report, says that Glasgow has been hit the hardest economically in Scotland.

In Glasgow, the economic decline in 2020 is expected to be -10.4%.

By contrast, the average annual economic growth rate for cities in Scotland is -9.7% in 2020, better than the UK average rate of -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 according to the report.

The research finds that UK cities and towns hardest hit by the economic fallout from the pandemic are likely to make the fastest recovery.

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 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.”

“This year’s survey shows that Edinburgh – thanks in part to its broad spread of economic sectors – has been less impacted economically than other cities, however in line with the rest of the UK where cities hardest hit will be quickest to recover, it seems Glasgow will be quickest to emerge.”

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.

Jonathan House, devolved and local government lead for PwC, said: “The pandemic has led to people living their life much closer to home and the likelihood is some of these lifestyle changes will stay for the medium-term.

“Citizens will value different things and those places that meet those needs will be the ones that bounce back quicker.

“This opens up opportunities for places that have advantages in terms of liveability and community, and where ‘price of success’ factors, such as housing affordability, are less of an issue.

“The report sets out a series of recommendations for leaders from across national and local government, as well as the private and third sectors, as they plan their recovery strategies.

“This includes taking a broad approach to economic wellbeing and building resilience will be essential to create liveable vibrant places where people want to live, work and visit.”