Aberdeen only UK city to create more wealth this year

  • Edinburgh beats London to become most productive UK city
  • Scottish cities storm ahead – with three of top five most productive UK cities based north of the border

Aberdeen has overtaken London to become the only major city in the UK that managed to grow its economy during the recession, reveals our research.

Our analysis of official calculations of ‘Gross Value Added’ – the measure of a region’s contribution to the UK economy according to the value of the goods and services it produces – shows that Aberdeen become the fastest growing UK city in the year to January 1 2010.

Aberdeen is the only Top Ten UK city where GVA per resident grew, rising 1.1% from £28,442 to £28,731 in the year to January 1 2010.

Our findings explain that as the centre for the UK’s oil & gas industry, Aberdeen benefitted from a booming energy sector as global demand for oil continued to power away.

Marc Waterman, partner at our London office, says: “The situation in Aberdeen is unique within the UK. It’s the only major city in the UK that has an economy based almost entirely around the oil and gas industry. Not only is it benefitting from a revival in North Sea exploration but Aberdeen is now a global leader in oil services companies.”

“Many Aberdeen headquartered oil & gas exploration companies and oil services companies operate on a global basis. Aberdeen has become a global centre of excellence for oil services companies so it directly benefits from the exploration boom in emerging markets.”

“While the economies of all other major UK cities suffered as a result of the financial crisis, Aberdeen was able to remain largely unaffected.”

Residents of Edinburgh are the biggest per capita contributors to the UK economy, generating £34,950 per head in the year to 1st January 2010, down 0.52% on the previous year. Londoners came second, with an average contribution of £34,779 per head, down 0.53% year on year. Belfast takes third place with £29,816 per head per year, down by 3.25% compared to the previous year. (See table below for the UK’s Top 40 towns and cities)

According to our findings, GVA for the British economy as a whole contracted by -2.7% in the year to January 1 2010 and the average Briton generates £20,341 per year.

London economy loses economic edge to Scottish cities

Scottish cities as whole performed well, with three places in the top five towns & cities going to Scotland– Aberdeen, Edinburgh and Glasgow.

Our research explains that this is the first time that London has lost its economic edge both in terms of productivity per person and economic growth.

Marc comments: “For years London easily outpaced other UK towns and cities in its economic contribution, driven by its huge wholesale financial services industry. But the credit crunch hit this sector hard and has damaged London’s ability to generate wealth for the economy.”

“Although Edinburgh also boasts a large financial services sector, it was never as dominant as London’s and so the downturn did not have the same devastating result.”

“Thousands of high paying banking jobs, along with advisers, such as lawyers, have been shed in London. The capital also has significant areas of poverty and high unemployment.”

According to Government figures, in 2010 unemployment in London stood at 9.1% while in Edinburgh it was only 6.3%. The figure for the UK as a whole was 7.7%.

Marc comments: “It might sound obvious, but people who are out of work do not contribute to the economic wealth of the country. London’s comparatively high unemployment rate will have had a sharp impact on its wealth creating potential.”

UK’s Top 40 towns and cities by growth in gross value added (GVA)

(Latest figures available are for the year to 1st January 2010)

Rank

Town/City

GVA 2008
(£ per head)

GVA 2009
(£ per head)

Change
%

1

Aberdeen

             28,422

             28,731

1.09%

2

Edinburgh

             35,134

             34,950

-0.52%

3

London

             34,964

             34,779

-0.53%

4

Liverpool

             19,956

             19,821

-0.68%

5

Bournemouth

             21,293

             21,142

-0.71%

6

Glasgow

             29,897

             29,472

-1.42%

7

Swindon

             28,036

             27,616

-1.50%

8

Stoke-on-Trent

             15,067

             14,808

-1.72%

9

Leicester

             19,987

             19,620

-1.84%

10

Blackpool

             12,036

             11,809

-1.89%

11

Nottingham

             25,795

             25,277

-2.01%

12

Derby

             22,878

             22,413

-2.03%

13

Northampton

             20,242

             19,812

-2.12%

14

Bradford

             15,289

             14,958

-2.16%

15

Dundee

             17,393

             17,011

-2.20%

16

Preston

             16,071

             15,714

-2.22%

Chester

             20,860

             20,371

-2.34%

Top 40 average

              21,195

             20,694

-2.36%

17

Milton Keynes

             29,361

             28,668

-2.36%

Sittingbourne

             17,625

             17,185

-2.50%

18

Bristol

             25,872

             25,216

-2.54%

19

Birmingham

             19,584

             19,074

-2.60%

20

Brighton

             21,169

             20,611

-2.64%

21

Hull

             15,977

             15,546

-2.70%

UK Average

              20,911

             20,341

-2.73%

22

Southampton

             20,538

             19,972

-2.76%

23

Sheffield

             18,011

             17,510

-2.78%

24

Plymouth

             16,669

             16,197

-2.83%

25

Swansea

             15,412

             14,974

-2.84%

Wrexham

             16,531

             16,061

-2.84%

26

Sunderland

             16,953

             16,469

-2.85%

27

Portsmouth

             21,003

             20,390

-2.92%

28

Coventry

             18,595

             18,032

-3.03%

29

Newcastle

             18,267

             17,697

-3.12%

30

Southend-on-Sea

             15,965

             15,449

-3.23%

31

Belfast

             30,819

             29,816

-3.25%

32

Manchester

             18,177

             17,567

-3.36%

33

Cardiff

             21,599

             20,864

-3.40%

34

Leeds

             23,487

             22,671

-3.47%

35

Telford

             18,996

             18,336

-3.47%

36

Peterborough

             24,238

             23,394

-3.48%

37

Wolverhampton

             15,653

             15,072

-3.71%

38

Dudley

             15,210

             14,622

-3.87%

39

York

             21,111

             20,221

-4.22%

40

Luton

             22,941

             21,829

-4.85%