Glasgow City Region Evidence: the Latest ECONOMIC QUARTERLY Covid-19 Impacts 6 Insights: Place 11

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Glasgow City Region Evidence: the Latest ECONOMIC QUARTERLY Covid-19 Impacts 6 Insights: Place 11 1 Welcome 2 Evidence: The Structure of the GCR Economy 3 Glasgow City Region Evidence: The Latest ECONOMIC QUARTERLY Covid-19 Impacts 6 Insights: Place 11 High Streets 12 DR JULIE GRAIL Housing Markets 13 DR JOHN BOYLE Commercial Property 14 DAVID MELHUISH Commercial Development 15 CHRIS BROWN Further Insights 16 Glasgow City Region Intelligence Hub 18 ANDREW ROBERTSON GLASGOW CITY REGION ECONOMIC QUARTERLY: WELCOME 2 Welcome to the first edition of the Glasgow City Region Economic Quarterly Each Quarterly will include a summary of any emerging evidence In our Insights section, our first topic is Place – specifically, how about the performance of the economy. By inviting experts to provide Covid-19 may be altering the Real Estate market. In this first edition, their insights, each report will also explore a specific topic related to we are very fortunate to have four leading experts provide their the economy. thoughts on key Place elements: In this edition, the section covers two elements: Evidence High Streets Dr Julie Grail, The BIDS Business The Structure of the GCR Economy Housing Market Dr John Boyle, Rettie & Co Being the first issue, you will find a summary of the structure of the economy – or at least how it was structured prior to March 2020. Commercial Property David Melhuish, Scottish Property Federation Latest Covid-19 Impacts Commercial Development Chris Brown, Igloo There is also a brief assessment of how the public health We are sure you will find their contributions very helpful. If you want to response to Covid-19 is impacting the economy, including a explore the topic of Place and Covid-19 in more detail, the final section future outlook. Whilst the end of the Brexit transition period is provides a summary of some further recent research. looming, this is not covered here, and will be covered in the next Being the first report, we would really welcome thoughts on what you edition. would like from future editions in terms of structure, content, and topics. Suggestions can be directed to the Glasgow City Region Intelligence Hub. GLASGOW CITY REGION ECONOMIC QUARTERLY: EVIDENCE 3 The Structure of the GCR Economy HOW THE CITY REGION ECONOMY WORKS JOBS: PUBLIC VERSUS PRIVATE SPLIT Glasgow City Region functions as an open and modern economy. Of the 855,000 jobs in Glasgow City Region an approximate 660,000 Much like other large city regions in the UK, the Glasgow City Region were in the private sector and 195,000 in the public sector. Over the economy has evolved over the last 40 years into a primarily service- past 10 years, the percentage of total jobs that are in the public sector based economy. has dropped from 25.1% to 23.3%. The proportion across the UK is 16.7%. JOBS BY INDUSTRY: A SERVICE BASED ECONOMY BUSINESS BASE 2020 BUSINESS COUNTS EMPLOYEE JOBS Whilst the Region’s business base is predominately SME’s, large enterprises employ the largest percentage of the workforce. Services 39,540 736,000 With over 49,000 enterprises, Glasgow City Region has the fourth Production 270 15,450 largest business base amongst the UK’s city regions. An estimated 44% of GCR’s jobs are in Small-to-Medium sized Manufacturing 2,795 52,000 enterprises (0-249 employees), with the remaining 56% located in Large enterprises (250+ employees). Construction 6,265 51,000 Despite having a relatively equal distribution by jobs, the GCR’s Agriculture 1,045 2,250 business base primarily consists of SMEs (99%). TOTAL 49,905 855,000 GLASGOW CITY REGION ECONOMIC QUARTERLY: EVIDENCE 4 GLASGOW CITY REGION’S PRODUCTIVITY economy is measured through Gross Value Added (GVA), and Glasgow City Region’s GVA was estimated as £42.9 billion in 2018. Goods and Services are produced by enterprises within the Region Over the last 20 years, the increased value of the Services sector to the and are consumed by households, the government, and by enterprises economy can be clearly seen. from within and outwith the City Region. The value of a regional GLASGOW CITY REGION ECONOMIC QUARTERLY: EVIDENCE 5 CONSUMPTION WITHIN AND OUTSIDE THE REGION Of the approximate £71.2 billion of goods and services produced in the Glasgow City Region in 2016; • £32.0 billion (45%) was exported outside of the City Region, • £14.7 billion (21%) was consumed by households, and • £12.5 billion (18%) was consumed by other industries within the City Region. In 2018, it was estimated that workers in Glasgow City Region produced £30.0 in GVA per hour worked. While the GCR’s productivity level is comparably low against other UK Core City Regions outside of London, it has experienced significant increases in the long-term – and is on track to overtake some of the other competitor city regions such as Greater Manchester and Liverpool. For a much more in depth look at economy, the updated Regional economic baseline will be available in February 2021. GLASGOW CITY REGION ECONOMIC QUARTERLY: EVIDENCE 6 Latest Covid-19 Impacts IMPACT ON THE SERVICE SECTOR – A DRAMATIC FALL The table shows how much Scotland’s Service industries have been IN GDP impacted. It does not take account of the latest lockdown measures and those industries which have been hardest hit already will The economy has taken a major hit in this financial year. The Service continue to be impacted. sector in Scotland grew in September, but was still -8.9% on the production levels recorded 12 months previously. SERVICE INDUSTRIES ENTERPRISES JOBS GDP CHANGE 2020 2019 September 2019-2020 Wholesale and retail trade; repair of motor vehicles and motorcycles 7,945 115,000 -3.1% Transportation and storage 2,090 37,000 -20.3% Accommodation and food service activities 4,080 57,000 -30.4% Information and communication 3,525 32,000 -11.2% Financial and insurance activities 1,110 34,000 -1.8% Real estate activities 1,940 15,000 +0.1% Professional, scientific and technical activities 8,140 58,000 -5.7% Administrative and support service activities 3,765 92,000 -15.4% Public administration and defence; compulsory social security 10 58,000 +0.1% Education 640 65,000 -5.7% Human health and social work activities 2,200 138,000 -13.9% Arts, entertainment and recreation 1,205 21,000 -24% Other service activities 2,890 14,000 -30.3% GLASGOW CITY REGION ECONOMIC QUARTERLY: EVIDENCE 7 IMPACTS ON THE LABOUR MARKET – FURLOUGH This does not take account of the latest lockdown measures and unfortunately, those industries which have been hardest hit already, This has already had a major impact on our workforce. The data below will continue to be impacted. shows the furlough data by local authority – again this is prior to the current lockdown arrangements. At its peak, almost 32% of the Region’s workforce was under furlough. JUNE 2020 JULY 2020 AUGUST 2020 SEPTEMBER 2020 East Dunbartonshire 13,300 13,900 4,800 3,800 East Renfrewshire 11,900 12,600 4,500 3,500 Glasgow City 88,300 92,900 30,200 23,600 Inverclyde 8,300 8,700 2,600 2,000 North Lanarkshire 49,500 52,300 14,600 11,100 Renfrewshire 26,800 28,300 8,800 6,900 South Lanarkshire 46,400 48,600 15,600 12,000 West Dunbartonshire 12,400 12,900 3,400 2,800 TOTAL 256,900 270,200 84,500 65,700 GLASGOW CITY REGION ECONOMIC QUARTERLY: EVIDENCE 8 IMPACTS ON LOCAL RESIDENTS – CLAIMANT COUNT Whilst this may be less than the UK and Scottish averages, almost 7% of 16-64 year olds now are receipt of some benefit – higher than the As with every other locality across the country, residents across the national averages of Scotland and the UK. Region have suffered as a result of the hit the economy has taken. There has been an almost 80% growth in residents claiming benefits. 10.0 160.00% 9.0 142.5% 140.00% 8.0 108.0% 120.00% 7.0 92.2% 89.4% 93.0% 89.3% 83.1% 84.3% 6.0 76.7% 79.8% 100.00% 66.9% 5.0 80.00% 4.0 60.00% 3.0 40.00% 2.0 1.0 9.3 7.8 7.6 7.3 6.9 6.6 6.4 6.2 5.1 6.0 6.3 20.00% 0.0 0.00% Scotland West Midlands North of Tyne West Yorkshire West of England United Kingdom Greater Manchester Glasgow City Region Liverpool City Region Sheffield City Region Cardiff Capital Region Claimant Count Rate February 2020 Claimant Count Rate October 2020 % Change in total Claimants Feb-Oct GLASGOW CITY REGION ECONOMIC QUARTERLY: EVIDENCE 9 LONGER TERM IMPACTS – FORECASTS It models a range of scenarios and has significantly revised down its unemployment impacts – from previous peak of around 12% across The nature of the lockdown and the different government support the UK (FRS Central Scenario), to approximately 7.5% (November measures, which are, in effect, keeping some people employed Scenario). It is difficult to project UK analysis on to the City Region whilst demand is supressed, means predicting short to medium term economy as the structure of the local economy is different to that of economic impacts is incredibly challenging. Over the past few weeks, the national. But, if this was to happen Regionally, then there would there has been a lot of publicity surrounding the Office of Budget be approximately 30,000 job losses in the coming months. This Responsibility’s November 2020 Economic and Fiscal Outlook. potential increase in unemployment is substantial considering that It covers a wide range of issues including Gross Domestic Product unemployment stood at 35,000 at the start of the year.
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