Cities set for jobs growth in last quarter
CARDIFF and Swansea have been identified as being in the top three cities in the UK for projected employment growth in the last quarter of this year.
However, according to the latest UK Powerhouse report from Irwin Mitchell and the Centre for Cties, in terms of year-on-year on the key economic measure of gross value added, their performance in Q4 puts them in towards the bottom of the growth league table.
With the end of the furlough scheme, only 36% of cities in the report are expected to increase employment levels in Q4 2021, with Cardiff and Swansea in second and third place respectively behind Cambridge.
Cardiff is expected to have an employment level of 255,100.
Over three in five cities are expected to see a fall in employment following the end of furlough in September, with many businesses expected to make redundancies for workers they can’t afford. Cardiff and Swansea are predicted to buck the trend, thanks to well-established employment in the public sector that will see essential jobs protected.
Despite Cardiff being in the top 10 for economic growth in Q4 2020, both the capital and Swansea will have fallen into the bottom five for
GVA growth in 2021.
This suggests that despite the protected jobs market afforded by the public sector, this will not lead to a corresponding growth in economic activity in the short term.
The UK Powerhouse report makes several recommendations for businesses looking to successfully emerge from lockdown and the challenges posed by Brexit.
These include the need for policies to encourage investment and improve skills and local government having bespoke plans in place to support job creation heading out of the Covid-19 crisis, when the furlough scheme ends.
The UK Government also needs to prioritise the implementation of the
UK-EU Trade and Cooperation Agreement (TCA) with as little disruption as possible to businesses and negotiate where possible to reach a smoother trading relationship with the EU post-Brexit.
The report suggests that Welsh cities will need such support, to reestablish positive economic growth, despite the benefits of a stable employment. At the start of the pandemic, Wales was losing £79m a day due to the lockdown, a GVA loss of 37%, and the road to recovery will take time.
Vicky Brackett, head of business legal services at Irwin Mitchell said: “Wales has a large manufacturing base and this, coupled with a strong public sector is going to protect employment, but any economic growth to come is predicted to be fragile at best.
“Lockdown will have changed some business models forever and, going forwards, it’s important that stability in the jobs market does not mask the need to stimulate economic growth in the longer term.
“Only 3.5% of the Welsh workforce had experience of working from home prior to lockdown and this fact, plus the absence of high-skilled service roles will need to be addressed to give Welsh cities a level playing field with other UK cities, as businesses throughout the UK adjust to a new normal and ponder how to attract the investment necessary for future prosperity.”