IT is a city which grew rich on Scotland's oil boom before suffering a slump as the price of crude plummeted worldwide.

But now experts say that Aberdeen is on the road to recovery following several years in the doldrums, with the economy rebounding and set to grow further in the years ahead.

An independent report assessing the challenges and opportunities ahead for the city has found that Aberdeen's economy returned to growth last year and that both employment and wages are rising.

The study, published by the Aberdeen Economic Policy Panel, examined the region's response to the downturn in the oil and gas industry and found there was "cautious optimism" for the coming years.

Aberdeen enjoyed years of growing wealth while the price of oil was high, but suffered financial hardship when crude prices tumbled in the second half of 2014, ushering in grim years for the fossil fuel sector.

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Aberdeen harbour

House prices across the region fell or became static, while more than 200,000 jobs were lost in the energy industry and its associated supply chain.

So sudden was the shift it led to stories of oil workers turning up for interviews as barmen and waiting staff in high-end sports cars they had only recently bought in the expectation the good times would last.

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However, the report found that the city is on the rebound, with North East economy predicted to grow by 1.5 per cent per year for the next decade.

At the same time employment levels increased by 3.4 per cent during the past 12 months, with more than three quarters of working age people in the city holding a job.

During 2018, average workplace earnings rose by 3.5% in Aberdeen and 4.6% in Aberdeenshire, compared to Scotland’s 1.0% average increase.

Aberdeen City Council Co-Leader Councillor Douglas Lumsden said that the region was enjoying a "renaissance" as it emerged from the economic downturn.

Cllr Lumsden said: “We’re proud of a proactive and dynamic approach to economic development and will continue to push forward with our plans, buoyed by the evidence that the strategy is supporting the renaissance of the region.

“We will also continue to invest in digital infrastructure, roads, schools and thousands of new Council homes in all corners of Aberdeen as we focus on inclusive economic growth and the vision for a city where everyone can prosper.

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“The increasing collaboration and partnership working we see is delivering results in innovation and industry. We have to build from the position of strength we are in and look forward with the same drive and determination that first established Aberdeen as an economic powerhouse.”

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Oil and gas is the lifeblood of the Granite City

The uptick in the city's financial fortunes follows news that it is now firmly on the tourist trail, with its hotel sector enjoying a long-awaited boom.

Aberdeen’s was recently a surprise inclusion in the New York Times list of top 52 places in the world to visit alongside Doha, Los Angeles, Lyon in France, New York, Los Angeles and Tahiti, while accommodation giant Airbnb named the Granite City as one of its top 20 trending global travel destinations for 2020.

The only UK city to appear on the list, it was praised for its “striking cityscape, fine dining and rugged coastal scenery”.

The city has also been boosted by the re-opening of Aberdeen Art Gallery following a £34.6 million revamp, which expanded its exhibition space to 18 galleries offering displays on nearby Balmoral and its links to Queen Victoria, the empowerment of women and the city’s relationship with the sea.

The region has also undergone major infrastructure investment, including the recently-opened Aberdeen Western Peripheral Route, the provision of digital infrastructure through the City Region Deal, and an planned expansion of Aberdeen Harbour.

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The report was launched at the State of the Cities Conference hosted by Aberdeen City Council at P&J Live.

Council co-leader Cllr Jenny Laing said: “At the inaugural State of the Cities conference last year I spoke of our ambition to deliver projects that fostered inclusive economic growth for the people of Aberdeen and of our determination to do that at pace.

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“In the 12-months since then the achievements have underlined that commitment.

“From the opening of P&J Live and Aberdeen Art Gallery to the investment in housing and schools, 2019 has been a year in the life of what I would describe as no ordinary city and an extraordinary council, delivering quite incredible achievements against the odds and with a backdrop of economic challenges that need no explanation.

“The message today is that we will not rest on our laurels."