A report into Aberdeen’s economic performance has given the city an outlook of “cautious optimism”, highlighting the potential for growth in the years ahead.
It’s the first annual report produced by the Economic Policy Panel, the independent panel formed to evaluate and advise on the economic performance of the city and the region.
A panel of specialists set out their findings against the backdrop of the challenges the region faced due to the fall in global oil prices from 2014 and the measures taken in response.
The Economic Policy Panel report, co-authored by Dr Hanan Morsy and Douglas Peedle, notes:
- The North-east economy is emerging from a difficult economic period with the potential to return to moderate growth in the coming years;
- The Panel heard consistent evidence of cautious optimism and signs that economic conditions were gradually improving;
- GVA per head in Aberdeen remains the highest in Scotland;
- The region continues to perform strongly in export markets, with around 21% of the value of Scottish exports coming from the North-east;
- Emerging signs of improvement in the labour market, with employment rates recovering and rising from 70% in Aberdeen in 2016 to 76% in 2018;
- The first rise in the number of jobs being supported by the UK offshore oil and gas sector since the downturn in 2014, increasing to 282,700 in 2018 from 280,000 in 2017;
- Stability returning to the local property market, suggesting the decline in house prices may have bottomed out;
- Independent growth forecasts of between 1-1.5% per annum until 2020, against the Scottish range of 0.85-1.7% and the UK range of 1.4-2.0%.
Whilst highlighting the positive trends in the local economy and strength of the economic fundamentals, the Panel also drew attention to challenges on a regional and national level.
These include the potential impact due to Brexit on business confidence and investment and uncertainty around the ability to recruit EU nationals and access to EU markets for imports and exports.
An ageing population, bringing increased demand for health and social care as well as a slow down in the growth of the working age population in future years, was also flagged in the report alongside the importance of technological change, the need to increase productivity and the future of the oil and gas sector.
The importance of inclusive economic growth – enabling as many people as possible to contribute to and benefit from growth – is also at the heart of the report.
The report was launched at the inaugural State of the Cities Conference, hosted by Aberdeen City Council.