By Scott Wright
ECONOMIC growth in Scotland’s two biggest cities has been forecast to double as output rebounds in 2022, driven by resurgent activity in the accommodation and food services, arts and entertainment, and education sectors.
Output is expected to expand by 5.7 per cent in Glasgow and 5.5% in Edinburgh, according to forecasts by property company Avison Young. In Glasgow’s case, the predicted growth would be nearly four times higher than its pre-pandemic average of 1.4%, while in Edinburgh the expansion of gross value added (GVA) would be double its pre-Covid ten-year average of 2.6%.
The bullish outlook for the cities follows more recent evidence that UK economic growth has slowed as households and businesses feel the impact of surging inflation. Annual consumer prices index inflation rose to a higher-than-expected 5.4% in December – its highest rate for nearly 30 years.
Avison Young forecasts that employment will rise by nearly 8,500 jobs in Edinburgh this year, of which 2,100 will be traditionally office-based roles, taking overall employment to a record high of more than 382,000.
And it expects even more jobs will be created in Glasgow, predicting 9,600 will be added to bring the total to 449,000 – also a record high.
However, the unemployment rate in both cities would still remain higher in 2022 than their pre-pandemic levels.
The unemployment rate in Glasgow is forecast to fall from 7.3% last year to 6.1% in 2022, which compares with a pre-pandemic rate of 4%. In Edinburgh, the unemployment rate is expected to fall from 4.2% in 2021 to 3.5% in 2022; before Covid the rate was 1.7%.
Growth of nearly 30% in accommodation and food services is forecast for both cities, while both Glasgow and Edinburgh are also expected to see growth of around 17% in arts and entertainment.
Stuart Agnew, managing director of Avison Young Edinburgh, said: “After two challenging years as businesses have grappled with the impact of the pandemic, 2022 looks very much like the turning point for Scotland’s capital with the local economy and jobs market predicted to grow substantially. Importantly for the city’s real estate market, it is expected that a quarter of these new jobs will be office-based roles.”
Alison Taylor, the firm’s managing director in Glasgow, said: “Despite the challenges brought by Covid, Glasgow portrayed itself well on the global stage during COP26 and it is well-placed to expand its economic base this year. We are already seeing evidence of this with the recent opening of the Barclays campus on the banks of the River Clyde, which is on track to have around 5,000 employees based there by 2023.
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