Belfast sees fastest economic growth of top UK cities
27th June, 2008
Latest statistics show that Belfast has seen its economy grow the fastest amongst the 30 largest UK cities with an increase of 99% over the last ten years (based on gross value added) to £26,792 per capita per year, according to our experts.
Our ranking compares the UK’s 30 largest cities by their Gross Value Added and their growth over the past ten years.
Gross Value Added is used to estimate the value of goods and services produced in an area to measure its contribution the overall UK economy.
Belfast has raised itself to the third place in the league table of the UK’s strongest economies right behind Edinburgh (1st) with £28,432 and London (2nd) with £27,672 per capita per year. The average Gross Value Added (GVA) for the UK equals £18,145 per capita per year.
Reasons for Belfast’s success
Commenting on Belfast’s success, Howard Spencer, Chairman of the UHY Hacker Young Group, says: “The IRA ceasefire in 1995 and the Good Friday Agreement in 1998, which brought an end to terrorism in Northern Ireland, have been fundamental in establishing the peaceful conditions necessary for business to prosper.”
“Increased investors’ confidence has spurred investments flows into Belfast allowing the city to engage into ambitious large-scale regeneration projects such as the Titanic Quarter and the Laganside while promoting local talents in architecture and design.”
“Belfast’s ability to capitalise on the growing trends in the service and knowledge economy has done the rest in propelling the city amongst the most prosperous areas of the UK.”
The large pool of a highly educated, young workforce available at a lower than the UK average cost has done a great deal in attracting a raft of customer service, telemarketing, financial services back offices operations, administration and high value added software development centres. Competitive real estate solutions and excellent telecoms and transport infrastructure also played a decisive role.
The biotechnology and IT sectors are booming too fuelled by academic expertise and skills produced by Belfast’s internationally renowned universities earning the city a world leading position in innovative research and product development.
Why Edinburgh ranks number one in the UK
Our experts say that Edinburgh is the UK’s strongest economy (£28,432 per resident per year) primarily thanks to its well established and fast growing banking and insurance sectors but that its status as the capital of Scotland has worked in its favour in boosting its public sector, notably in the legal profession.
In addition, the city has benefited from the business embassy effect which has seen a number of companies duplicating their headquarter functions from London to Edinburgh in order to get closer to their Scottish clientele.
“This has helped Edinburgh consolidate it position as the second largest financial centre in the UK after London”, says Howard Spencer.
Explaining why Edinburgh has outperformed London in individual GVA, Howard Spencer says: “As Europe’s leading financial centre, London should have fared better than Edinburgh but its incredibly high property prices are putting a serious dent in business earnings.”
“While still generating substantially more revenue than Edinburgh, London is also home to five of the UK’s ten most deprived local authorities , which has raised the region’s unemployment rate to 7.9% , the highest in the UK. Its overstretched and unreliable transport infrastructure is posing constraints on its economic growth as well.” he adds.
Research further shows Derby was the second fastest riser behind Belfast with an increase of 88.5% over the last ten years and a GVA £21,676 per capita per year. Glasgow is also closing the gap with an increase of 84.9% to 24,375 per capita per year.
Howard Spencer comments: “Derby, while working on strengthening its engineering manufacturing base, has managed to expand greatly in the service industry. With several software companies setting up in its premises, Derby is opening up to creative industries as well.”
“It's central position and good transport links to other areas of the country has made the city a location of choice for businesses. Its university and five colleges churn out skilled workers to fill demand from the traditional as well as the emerging high-tech sectors.”
“Similarly, Glasgow has seen a phenomenal growth in the financial sector though retaining its economic base in the manufacturing sector, which it has successfully modernised around new technologies. With its strong retail sector as the UK's largest retail centre after London and more office space available for businesses to establish, Glasgow is now becoming a fierce rival to Edinburgh.”
Stoke-on-Trent is picks up the 'wooden spoon'
According to our study, Stoke-on-Trent came out as the last in class with a GVA amounting to £14,001 per capita per year and the lowest growth over the last ten years (34.6%).
Howard Spencer comments: “Despite attracting successful companies in the financial and professional service sectors, Stoke-on-Trent has failed to create the strong connection between business and education which enabled cities like Belfast to capture opportunities in the high value innovation sector and therefore missed the train.”
Previous research by our experts reveals that the number of businesses based in Stoke-on-Trent is in rapid decline. With a net loss of 6 businesses per 10,000 resident adults in 2006, Stoke-on-Trent took the 49th position amongst the UK’s 50 largest towns and cities by their ability to create new businesses.
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