The highly regarded EY ITEM Club think-tank has published its latest Scottish economic forecasts today, which provide fascinating insight into what the future holds for the nation's cities.
Here are five key points about the future for Scotland’s cities:
1. Glasgow is forecast to outperform the Scottish economy as a whole between 2025 and 2029. Its average annual growth over this period is forecast by the EY ITEM Club to be 1.7%. Over the same period, Scotland is forecast to achieve annual average growth of 1.1%.
2. Edinburgh is expected to marginally outperform Glasgow over the 2025 to 2029 period with average annual growth of 1.8%.
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3. The city of Aberdeen is projected to “continue to struggle” over the 2025 to 2029 period. The decline of oil and gas activity is flagged as the key reason why Aberdeen’s prospects over the period to 2029 are not as bright as those of Scotland’s two largest cities. Aberdeen is expected to grow at an average annual rate of just 0.8% between 2025 and 2029.
4. Aberdeen is one of the few local authority areas in Scotland to have fewer jobs in 2023 than in 2010, the EY ITEM Club observes, adding: “During this time, it has lost nearly 18,000 jobs, equivalent to 10% of its workforce in 2010, largely due to the ongoing decline in the local oil and gas industry.”
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5. In terms of the relatively strong prospects projected for Glasgow and Edinburgh, compared with some of Scotland’s island and rural areas forecast by the EY ITEM Club to be affected by declines in working-age population between 2025 and 2039, the think-tank says: “This is principally due to sector mix with private services expected to drive growth located in Scotland’s larger urban areas. A range of other factors that support economic development are also key, including working-age population growth, skills, physical and IT (information technology) infrastructure, and public and private sector investment. The inflow of foreign direct investment in particular is directly related to increases in labour productivity.”
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