Cardiff is due to experience gross value added (GVA) growth higher than any other major UK city except London in 2024 and 2025.
According to the annual Demos-PwC Good Growth for Cities Index, Cardiff is estimated to grow at 1.3% and 2.0% annually in 2024 and 2025 respectively, with Swansea slated for 1.0% and 1.7% annually in the same period.
The high growth expectations for Welsh cities are due to their sectoral make-up; a larger share of economic activity in manufacturing, health and social work, finance and insurance, and public administration and defence, all of which are expected to experience relatively higher growth.
The Demos-PwC Good Growth for Cities Index ranks 51 of the UK’s largest cities – generally considered those with populations of at least 350,000 people – plus the London boroughs as a whole, based on the public’s assessment of 12 economic measures, including jobs, health, income, safety and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment and business startups.
In the city index, Cardiff and Swansea are ranked 13th and 42nd out of 52 respectively, performing well on metrics relating to owner occupation, work-life balance, skills and income distribution, but below the UK average on income, health, and the quality of high streets.
John-Paul Barker, Regional Market Lead for PwC in the West of England and Wales, said:
“This year’s Index identifies a clear reason for leaders in Cardiff and Swansea to be optimistic: the areas of the economy in which we are most active are enjoying periods of growth, and we’re due to experience economic growth significantly faster than the UK average.
“But ensuring that economic growth is sustainable and inclusive – and translating it into the sort of ‘good growth’ our report articulates – will depend on the expertise and collaboration of our devolved and local leaders. High streets, support for new businesses and health are key concerns.
“Our Framework for Growth research also showed a potential uplift of £923 billion to the UK economy by 2035 if we adopt and deliver a successful industrial strategy. Wales is well positioned to contribute to – and benefit from – that growth, if it is able to identify the most pressing areas for investment and is agile enough to take its opportunities. In our view, the most pressing need is for a joined-up energy-industrial strategy which capitalises on Wales’ potential as a hub for New Energy and supports strong primary industries and manufacturing hubs. With strong devolved leadership, we can leverage energy transition to reverse deindustrialisation, create jobs and deliver wider social benefits.”
Plymouth is the highest performing city in the annual Demos-PwC Good Growth for Cities Index, with Bristol rising to second place and Southampton remaining in third place. These cities scored particularly highly across income distribution, work-life balance, jobs and skills.
Cities across the South West region lead the latest Index, with Plymouth, Bristol, Swindon and Exeter all being among the highest performing cities, scoring above the UK average for health & safety and skills. Despite this, the region’s cities score less well on new businesses and house price-to-earnings relative to the rest of the UK.
PwC’s research shows that the public are most focussed on issues impacting their financial wellbeing, with measures such as income, jobs, and housing seeing the biggest increase in importance to the public. This shift in priorities has impacted cities’ performances, with the historically strong performing cities of Oxford and Milton Keynes seeing the most significant declines in scores, performing less well on income distribution, housing and high streets and shops.
Analysis in the Index shows the performance on house price-to-earnings ratio saw the largest decline across UK cities from last year’s Index – with the average house now costing over eight times the average earnings, compared to just four times in the 1990s. Cities with the largest social housing waiting lists, such as London, Birmingham, Manchester and Newcastle, are among the lowest performing cities in the Index.
Rachel Taylor, Government & Health Industries Leader at PwC, said:
“Raising prosperity across the UK is needed more than ever as we continue to see growing inequality in housing, jobs and education. There is an increasing imbalance within and between neighbourhoods, which is being driven by disparities in access to quality education, jobs and housing. This is felt not only across different regions, but also between people living within the same postcodes in cities.
“If we are serious about economic growth as a country we need to provide people and places with the foundations on which they can fuel that growth – access to jobs, skills and education and affordable homes. The public’s priorities are clear and together local and national government, businesses and the third sector need to work together through local growth plans tailored to local needs and opportunities to make this a reality.”