A new economic report predicts that Swansea will lead the Covid-19 recovery in Wales, with a rapid employment rebound by the end of this year, although prospects for 2021 remain uncertain.
The latest UK Powerhouse report by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr), reveals Swansea will be in the top ten of UK cities for employment, with 8.1% year-on-year growth projected by the end of 2021.
The positive uptick in the city’s employment prospects is due to public sector jobs in education, health and administration being among those least affected by the coronavirus crisis. The sector is set to remain the biggest source of employment in the city and the employment opportunities that continue to be created are projected to benefit Swansea in the year ahead.
Source: UK Powerhouse
|Employment Level, Q4 2021||Growth (YoY)|
This year has seen both Swansea and Cardiff cope well with the impact of lockdown, with Cardiff in the top 20 Powerhouse cities in terms of economic output, at -8.5% annual economic growth, with Swansea lower down the list with 9.1% annual GVA* growth to the end of the third quarter.
Both cities have seen employment fall in 2020, but have fared better than most, with Swansea in the top ten of cities for employment in the third quarter of 2020, on -1.6% year-on-year growth, with Cardiff just behind on -3.2%.
By the second quarter of next year, Swansea is projected to be fifth in the list of UK cities for employment, moving into positive 4.8% year-on-year growth. Worryingly, Cardiff slips down to 17th, on 0.0%. In terms of annual economic output growth , Swansea is forecast to drop with 22.9% annual GVA growth and Cardiff will be seventh bottom of the Powerhouse list with a 20.4% year-on-year increase.
By the end of 2021, Wales is expected to be a country of contrasts, with Swansea in sixth place in terms of employment and Cardiff in 15th position, with 6.4% growth year-on-year. Yet by using annual GVA growth as a measure, both are projected to be in the bottom 20 of UK cities in terms of economic output in the fourth quarter, with Swansea on 6.8% and Cardiff on 6.5% annual growth.
Vicky Brackett, CEO at Irwin Mitchell’s Business Legal Services division, said: “Earlier this year, Wales was losing £79m a day due to the lockdown, a GVA loss of 37%, so to have taken such a hit and see jobs projected to survive into 2021 is no small achievement.
“Wales has faced challenges on three fronts this year, with a large manufacturing base heavily impacted by lockdown and fewer ‘high skilled’ service roles, coupled with a workforce where just 3.5% had experience of working from home prior to lockdown.
“Swansea’s service sector aside, these factors put some Welsh cities at disadvantage compared to others in the UK and while employment is set to rise in 2021, it’s telling that economic output is forecast to remain fragile. The weaknesses of the economy remain and Brexit is still to come.
“Swansea has a robust service sector to fall back on but forecasts that see Welsh cities near the bottom of the table for economic growth next year are a big concern. The furlough scheme has undoubtedly helped many and with a vaccine in sight we must hope that Wales will benefit from government support as we emerge from what has been a difficult time for many people in Wales.”