Flatlining investment, jobs and tourism have been branded a “cause for concern” amid fears Edinburgh’s economic recovery has hit a bump.
The city is stagnating or in decline across seven key economic indicators released as part of Edinburgh City Council’s monthly update. The statistics raise fears that Edinburgh risks being overtaken by fast-growing UK cities such as Manchester and Birmingham.
There was no overseas investment in the city in March, and 36 fewer new business start-ups compared to the same month in 2013. Hotel occupancy rates were three per cent below levels in other cities, and there was a stark reminder of the continuing impact of the recession on jobs, with the employment rate still 1.1 per cent lower than in 2012.
“We have to be vigilant and redouble our efforts to attract investment,” said Graham Birse, director of the Edinburgh Institute at Edinburgh Napier University. “We do need to keep an eye on our competitor set. I would say that if for three or six months we were behind our competitor set in terms of new businesses and inward investment, that would be a cause for concern.”
Gordon Henderson, of the Federation of Small Businesses, said while members showed “record confidence”, the poor figures weren’t a surprise, adding: “We have always said the recovery is fragile, and needs to be managed very carefully. These fluctuating figures show that.”
However, economists warned against putting too much faith in one month’s statistics, and said agreement over the £850 million redevelopment of the St James Quarter was an encouraging sign.
“I don’t think it’s any accident developers, the city and the Scottish Government have reached agreement on the way forward on that,” said Mr Birse. “Its timing is appropriate as we emerge from recovery. Clearly there’s more confidence among people who are going to be investing in it that it’s going to generate a return.”
And Heriot-Watt University professor of enterprise policy Mike Danson said Edinburgh would grow more slowly than its competitors because it was “less hard-hit by the recession than other cities”.
A council spokeswoman said: “It is difficult to judge an economy over one month and there is much investment in the pipeline which will feed into Economy Watch for the future. Last week for instance we announced the biggest commercial development to be secured for Edinburgh in recent memory at the St James Quarter.”