New research reveals that the city of Swansea will marginally outperform Cardiff as the UK emerges from recession in mid-2023. A study from law firm Irwin Mitchell has predicted that Swansea's economy will return to growth at a slightly faster rate than the Welsh capital in the final three months of 2023.
The report, which estimates that the UK entered into a recession in the second half of 2022, expects economic growth to resume in the second half of 2023.
According to the research, Swansea's economy is expected to be half a percentage larger in the final quarter of 2023 compared to the same quarter in 2022. While Cardiff is predicted to come in slightly behind Swansea with year-on-year growth of 0.4%, taking the total size of its economy to £14.6bn.
Read more: The 23 companies in Wales to watch in 2023
However, in terms of employment, Cardiff is expected to fare better in the last quarter of 2023 increasing employment levels by 1.5% annually and taking the total headcount in the city to 235,200.
While employment figures for Swansea for the same quarter are expected to see a 0.2% year-on-year contraction, placing it in the bottom five of the league table for employment.
Moreover, both cities were the only two from Wales included in the UK-wide league table and were placed towards the bottom of the table.
Across the UK, Exeter is predicted to have the fastest growth in the year to Q4 2023 with 1.3% annual GVA growth forecast. The Devon city is also expected to see annual employment growth of 1.7% in Q4 2022 and Q4 2023.
In recent years, there have been large infrastructure investments in Exeter, and the city is prioritising carbon reduction investment in the future.
Reading is placed second in the league table with an estimated 1.1% annual GVA growth. This is partly attributed to the improved rail links to London which includes last year’s opening of the Elizabeth line.
The report said Reading’s strong links to the capital and cheaper office rents make it an attractive city for businesses, such as Microsoft and Cisco Systems, who have all located there.
The Irwin Mitchell City Tracker has been produced by the Centre for Economics and Business Research (Cebr) and examines 50 locations across the UK, forecasting future growth in terms of gross value added and employment.
Cebr managing economist Josie Dent said: "2023 will be a difficult year for consumers and businesses across Wales, with the cost-of-living crisis expected to lead to falling economic activity. However, Cebr forecasts that economic growth will resume in the second half of 2023, with most cities expected to see an annual expansion in GVA by Q4 2023.”
Charlotte Rees-John, partner and head of Irwin Mitchell’s consumer sector, said: "Last year presented numerous challenges and the downward pressure on spending activity, which continues to be concentrated in the consumer sector, looks set to continue throughout the first half of 2023.
"The consumer sector has however been one of the most resilient, agile and innovative sectors in recent times and those businesses that succeed during 2023 will be in a very strong position to take advantage of a more stable economic environment in 2024.”
She added: "Considering longer-term aspirations, such as the transition to carbon net zero, is something all businesses, irrespective of the sector they are in and the pressures that they are facing, need to do. ESG is fast becoming a priority for the majority, particularly at a time when there is huge pressure and scrutiny from consumers and investors who are increasingly making their decisions based on ethical as well as financial factors.”
Read more:
