EDINBURGH and Glasgow are set to see their local economies be amongst the fastest growing as the UK emerges from recession in the second half of 2023, says a new study by law firm Irwin Mitchell.
The Irwin Mitchell City Tracker has been produced by the Centre for Economics and Business Research (Cebr) and examines 50 locations across the UK, forecasting future growth in terms of GVA* and employment.
The report, which estimates that the UK entered into a recession in the second half of 2022, expects economic growth to resume in the second half of 2023.
According to the research, Edinburgh’s economy is predicted to be 1.1% larger in Q4 2023 than it was in the final quarter of 2022. It is also expected to be in the top 10 for job creation with employment levels rising by 1.6%, taking headcount to 371,200.
Glasgow comes eighth in the table for GVA growth with a 0.8% year-on-year increase expected in the final quarter of 2023. This would take the size of the economy from £23.3bn to £23.5bn.
Fastest growing city economies (YoY) GVA 2023 Q4 – Irwin Mitchell City Tracker
Despite the strong performance of Edinburgh in 2023, the report predicts a tough year for Aberdeen. At the end of this year when the UK is expected to be out of recession, GVA in the city is expected to fall by 0.2% to £16.7bn. The city is expected to see employment growth of 0.7% in Q4 2023 compared to Q4 2022.
Charlotte Rees-John, partner and head of Irwin Mitchell’s consumer sector, said:
“Last year presented numerous challenges and the downward pressure on spending activity, which continues to be concentrated in the consumer sector, looks set to continue throughout the first half of 2023.
“The consumer sector has however been one of the most resilient, agile and innovative sectors in recent times and those businesses that succeed during 2023 will be in a very strong position to take advantage of a more stable economic environment in 2024.”
Charlotte added: “Considering longer-term aspirations, such as the transition to carbon net zero, is something all businesses, irrespective of the sector they are in and the pressures that they are facing, need to do. ESG is fast becoming a priority for the majority, particularly at a time when there is huge pressure and scrutiny from consumers and investors who are increasingly making their decisions based on ethical as well as financial factors.”
Josie Dent, managing economist at Cebr, said:
”2023 will be a difficult year for consumers and businesses across Scotland, with the cost-of-living crisis expected to lead to falling economic activity. However, Cebr forecasts that economic growth will resume in the second half of 2023, with most cities expected to see an annual expansion in GVA by Q4 2023.”
