Edinburgh is outperforming rival UK cities during the recession on several key economic indicators, in spite of the crisis that has engulfed its two biggest financial employers, Royal Bank of Scotland and HBOS.
The Scottish capital has done better in terms of new businesses being incorporated, house prices and city-centre footfall over the past year than Manchester, Newcastle, Glasgow, Leeds, Nottingham, Birmingham, Bristol, Liverpool or Cardiff.
“There’s no doubt Edinburgh has been adversely affected by the declining economy across many areas,” said Tom Buchanan, a city councillor and convener of the council’s economic development committee. “But we’ve had a relatively soft recession compared with the experience of similar-sized UK cities.”
Figures released by the council showed that Edinburgh attracted 13 overseas investments in the first six months of the year – more than in either 2008 or 2007.
Mr Buchanan said the city’s resilience was explained by its strengths in non-financial sectors such as tourism, life sciences and education.
“Although our financial sector has been shaken by the downturn, it has in the past rather overshadowed other sectors that seem to be coming to the fore,” he said. “We have a highly educated workforce with more than half holding a degree and these are easily transferable skills.”
However, Mr Buchanan said there were still challenges ahead. Edinburgh is used to full employment – and unemployment rose by 77 per cent in the year to June, significantly faster than the annual average across comparable cities. But the city’s jobless rate of 3.1 per cent remains below the overall Scottish rate of 4 per cent and the UK’s 4.1 per cent. So far this year, HBOS has cut about 400 jobs in Scotland, most of them in Edinburgh. RBS has cut about 200 Edinburgh-based jobs, though further redundancies are expected at both banks.
In an effort to stem the loss of skilled workers, the council, along with Edinburgh Chamber of Commerce and the Business Gateway, has launched an online database on which professionals facing redundancy are invited to register their skills and experience. It will then be made available to local businesses looking for managerial support. Fraser Lusty, manager of the Skillsbank project, said: “An increasing number of experienced individuals are now faced with … being made redundant.”
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