Aberdeen tracks above average for house-prices-to-earnings ratio - a factor which has seen the largest decline across the rest of the UK - in the latest iteration of PwC’s Good Growth for Cities Index
Alongside Glasgow and Edinburgh, it also outperforms the UK average on skills (16-24 and 25+)
Analysis predicts that, relative to other Scottish cities on the Index, Aberdeen will see strongest economic growth in 2024 and 2025 - despite falling six places in the overall Index rankings
Raising prosperity across the UK is needed more than ever, says PwC, as research shows growing inequality of access to housing, jobs and education remains a key issue across regions and cities
Aberdeen has slipped six places down the rankings in PwC’s latest Good Growth for Cities Index. The city region - which takes into account Aberdeen, Aberdeenshire and Angus local authorities - has slipped six places, from 31st place last year, to 37th place.
The fall in ranking comes despite the city performing above the UK average on key economic performance indicators including the ratio of house prices-to-earnings, transport, and skills among 16-24 year olds and over-25s.
The Demos-PwC Good Growth for Cities Index ranks 51 of the UK’s largest cities (generally considered those with populations of at least 350,000 people), plus the London boroughs as a whole, based on the public’s assessment of 12 economic measures, including jobs, health, income, safety and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment and business startups.
The Index weights each variable based on the UK public’s opinion on the relative importance of the measure in question, with the most important indicators for Scots being income distribution, income, safety and work-life balance. This indicates those living north of the border are prioritising personal wealth, a fair economy and personal wellbeing.
In comparison, the analysis shows that house-price-to-earnings ratios and skills indicators are weighted as less important for Scots than the UK average.
Of all 12 economic factors measured, Aberdeen’s biggest improvement was in transport, with the biggest decline in jobs, in comparison with last year’s index - demonstrating an unemployment rate higher than the UK average. The city performed broadly in line with the UK average on most other measures, including income, income distribution, work-life balance, environment, safety and high streets.
The report, which also looks at expected economic growth for each city and Scotland as a whole, predicts Aberdeen to have the strongest economic growth of the three Scottish cities included in the Index.
The analysis predicts economic growth of 1.2% in 2024 and 1.8% in 2025 for Aberdeen - which is exactly in line with the expected UK average growth. This is mostly driven by projected growth in the ‘professional, scientific and technical’ sector, and could be attributed to Aberdeen’s strong engineering core.
Martin Cowie, PwC Scotland’s Market Senior Partner for Aberdeen, said:
“While it’s disappointing to see Aberdeen slip down the overall rankings in the latest Good Growth for Cities Index, a closer look at performance across the key economic indicators in the context of public priorities shows that we have a real opportunity to strive for further improvement.
“Above average performance on skills, commuting times, and the ratio of house prices to earnings - which has declined massively across UK cities from last year’s Index - gives the city a strong basis to work from. Particularly when taking into account the North East’s unique opportunity to lead the UK’s energy transition. However, we must take account of the indicators Scots place the most value in and look to make improvements in those areas.
“Our public and private sector organisations need to continue working closely with devolved and national governments and higher education institutions to ensure we can re-skill our workers to drive a energy transition, and attract fresh talent across additional key sectors like emerging digital tech and life sciences, to live and work in the area - thus making it thrive.”
About the Good Growth for Cities Index
The Demos-PwC Good Growth for Cities Index was established in 2011 and is updated annually.
The Index looks beyond GDP and covers broad economic measures. These include jobs, health, income, safety and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment and business start-ups. The index measures the performance of 50 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and ten Combined Authorities, against this basket of 12 factors which the public think are most important when it comes to economic wellbeing. More details on the methodology can be found in the report.
About Demos
Demos is a cross-party think tank: an independent, educational charity, which produces original and innovative research. Find out more at www.demos.co.uk
About PwC
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