Only London beats Edinburgh on productivity in UK

Edinburgh's economy is in good shape. Picture: Tony Marsh

Edinburgh's economy is in good shape. Picture: Tony Marsh

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AVERAGE earnings in the Capital are second only to London, it has been revealed, as a look at the city’s economy showed that local industry was booming.

On average a person living in Edinburgh earns £27,800 per year – less than London’s average of £33,100 but more than the closest Scottish city, Glasgow, with £24,000.

High-paid jobs in the financial sector, along with continued investment in the city and a buoyant tourist economy, are among the reasons for the high average wage.

Details on the city’s economy compiled for the latest Edinburgh By Numbers report showed that the Capital was the most productive city in the UK outside London – and has the lowest percentage of working-age residents on Jobseeker’s Allowance.

Output per resident in Edinburgh is higher than any other city in the UK outside central London.

Graham Birse, of Edinburgh Napier University’s business school, said the Capital’s high average earnings came against a backdrop of wages falling in real terms across the UK.

He said: “It’s good to see Edinburgh holding its own in this league table despite all the problems in banking. It’s a reminder that Edinburgh has a far more robust and healthy economy than some people think.”

But he pointed out it was only a couple of weeks ago that more job losses at RBS in Edinburgh were announced.

Dave Watson, Unison’s head of bargaining and campaigns, said Edinburgh’s high average earnings were almost certainly due to the effect of so many well-paid jobs in financial services.

But he added: “Scotland is not bottom of the table for wages by any means – we’re about halfway now. The trouble in Scotland is the inequality – we have some of the lowest-paid workers as well as some of the highest earners.”

The Edinburgh By Numbers report, compiled by the city council, says that the Capital topped the table for foreign direct investment in major UK cities, with 22 projects last year, creating 1352 jobs.

And it revealed the city’s top 20 companies, led by Scottish Widows, Diageo and Standard Life, made profits of more than £3 billion in 2011.

The report shows around 45 per cent of new businesses in Edinburgh survived for more than five years. And the number of empty shop units in the city centre has fallen from 8.2 per cent to 7.1 per cent.

Mr Birse said: “What we are seeing is the traditional strengths Edinburgh offers in financial services, banking and tourism being augmented by a growth in IT and the creative industries. These sectors must work together to promote the city.

“What is at stake is the pace of our recovery and our capacity to develop jobs for young people. There are significant numbers of young people who are chasing jobs and need to find opportunities.

“We need to create new high value-added jobs and Edinburgh has the most potential to create these jobs of any city outside London.”

The statistics show NHS Lothian is the city’s biggest employer with 19,890 staff, followed by the city council with 18,617 and Edinburgh University with 12,227, then Royal Bank of Scotland with 8368, Lloyds Banking Group with 7500 and Standard Life with 5259.

Altogether 74 per cent of Edinburgh residents in employment work in the private sector.

Professionals make up the biggest single group in the workforce at 30 per cent, while health and social work is the biggest sector, employing 15 per cent, followed by wholesale, retail and repair at 12 per cent, financial services at 11 per cent and education at ten per cent.

Edinburgh had the second highest number of working-age residents educated to degree level or above with 136,900. And the data shows just 3.2 per cent of working-age residents in Edinburgh are on Jobseeker’s Allowance.

The report also paints a detailed picture of the Capital’s tourism industry with 3.69 million visits to the city resulting in a total spend of 
£1.16 billion or £314 per visit.

And 4,324,000 people are recorded as having attended major festivals in Edinburgh last year, including 2,380,400 at the Fringe, 220,000 at the Tattoo and 215,000 at the International Science Festival.

Hotel room occupancy 
appeared to be marginally down last year from 2011, but a breakdown of average daily expenditure by visitors showed £29.96 went on accommodation, £23.37 on eating and drinking, £16.04 on shopping, £9.65 on entertainment and £4.83 on travel and transport.

City council economy convener Frank Ross said the tourism industry was one of Edinburgh’s great strengths. “We obviously have a fantastic attraction in terms of the city itself, but the industry is doing a great job in attracting people and having a quality offering, and the airport has been 
working hard to bring more 
direct flights.”

He also predicted a bright future for the finance sector.

“The economic downturn has resulted in some of our traditional banks shedding jobs, but we have also been able to attract new jobs from Sainsbury’s, Tesco and the Green Investment Bank. These organisations are coming here primarily because of the quality of our workforce.”