Belfast set for resilient economic post-Covid recovery, says PwC

  • The economic impact of the Covid-19 pandemic is having a marked effect on Belfast, but the city is expected to see a return to growth this year, due to resilience in key sectors, according to the latest Demos-PwC Good Growth for Cities Index.

    The Index, which looks at the economic impact of the pandemic across 42 cities in the UK, forecasts an annual economic growth rate for Belfast of -11.4% in 2020. This is lower than the UK average growth rate of -11.0%, however the city’s economy is expected to grow by 4.9% this year, ahead of the UK average.

    The reason for the swift start to Belfast’s recovery is in part due to the city having a higher than average proportion of its economy in the wholesale and retail trade sector, which is expected to be able to manage the impacts of the pandemic in line with the UK average impact for all sectors, however continued uncertainties, particularly in the post-EU trading environment means that action is required so that levelling up is a reality, not an unattainable aspiration.

    The report also finds local authorities in areas in and around the city of Belfast had the highest proportions of workers placed on the UK furlough scheme with 8.8% of workers on furlough, ahead of the average UK rate of 8.1%.

    RELATED: Average NI jobseeker rejected 13 times during pandemic, new resources available to help

    The Demos-PwC Good Growth for Cities Index ranks 42 of the UK’s largest cities based on the public’s assessment of 10 key economic wellbeing factors, including jobs, health, income and skills, as well as work-life balance, house affordability, travel-to-work times, income equality, environment and business start-ups.

    PwC’s GVA analysis took into account a city’s sectoral make-up, the impact of the use of the furlough scheme to protect jobs, and rates of Universal Credit claims, Covid infection and mobility rates to project GVA growth rates for 2020 and 2021.

    'Those hit hardest will recover quickest'

    The report finds that UK cities and towns hardest hit by the economic fallout from the pandemic are likely to make the fastest recovery, but are expected to be worse off than at the beginning of the pandemic compared to more resilient places.

    While there will be bounce back for hard-hit cities, recovery will not necessarily instigate an increase in economic activity - leaving low-performing cities worse off than at the beginning of the pandemic compared to more resilient places.

    Good Growth for Cities report calls for the UK’s recovery to look beyond national GDP and double-down on efforts to address the individual challenges facing towns and cities to level-up inequalities.

    RELATED: Belfast ranked in top 10 Tech Cities of the Future

    The Good Growth for Cities research highlights that addressing structural issues - such as improving local skills, encouraging new business development and addressing local environmental challenges - will enable cities and towns to achieve longer-term good growth than traditional economic measures.

    Covid-19 has shone a spotlight on some of the wider social and economic challenges facing the country, and a failure to tackle these will hamper the longer term recovery prospects of cities and towns in the aftermath of the pandemic.



    Alongside health, addressing unemployment and improving skills levels should be a priority nationally and locally - particularly for younger people.

    Kevin MacAllister, Regional Market Leader, PwC Northern Ireland, said: “Like all cities in the UK, Belfast is coping with a hard economic impact from the pandemic, however our Good Growth for Cities Index does show that we will see growth return in 2021. What we have to do collectively is harness that growth and invest in the right way.

    RELATED: Danske: NI's economic recovery underway but rising COVID-19 cases and Brexit pose risks

    “The pandemic has made us more aware of economic and social inequalities and it is therefore necessary to look beyond GDP and focus efforts on tackling the issues that really matter to the public, and our local economies, such as skills, sustainable income and health and wellbeing.

    “This year’s Index shows us that Belfast is performing above average for jobs, work-life balance, house price to earnings, owner occupation, transport and income distribution, ensuring our city remains an attractive place to live and work.”

    Cities and towns with ‘Good Growth’ are more resilient

    Many of the cities that perform well in the Good Growth Index - including the Scottish cities of Edinburgh and Aberdeen, and cities in England such as Norwich, Swindon, Southampton, Portsmouth and Oxford - have been relatively less economically impacted by the pandemic. Their sectoral mix and performance on broader economic and social indicators have to some extent provided resilience.

    Many poorer performing cities in the Good Growth Index - including Liverpool, Southend, Medway, Doncaster and Bradford - have been hit hard by the pandemic. These cities have been more exposed to the impacts of COVID-19 and have less resilience in terms of broader economic base and social wellbeing.

    RELATED: 50 apprenticeships announced as part of NI Covid recovery

    An exception to this pattern is Leicester - whilst performing well in the Good Growth Index it will be one of the cities hardest hit economically by the fallout from Covid-19.

    Leicester was the first city to have stricter restrictions imposed following the relaxing of the initial national lockdown in June 2020. The decreased footfall in Leicester city during the summer period is likely to further reduce the performance of Leicester’s retail sector.

    As the UK looks to ‘build back better’ from the pandemic, ensuring that the recovery lays the foundations for a more resilience against future shocks will be vital.

    New opportunities

    With more people working from home, towns and cities have new opportunities to build virtual connections and play to their strengths in terms of liveability, affordability and community.

    There is still much uncertainty over how these trends will play out in the long-term, however a move to hybrid home and office working does have the potential to level up certain areas of the country. PwC research shows that areas that could benefit from a shift to working from home include outer London and smaller cities like Wigan, Bradford and Blackpool.



    Jonathan House, devolved and local government lead for PwC, said: “The pandemic has led to people living their life much closer to home and the likelihood is some of these lifestyle changes will stay for the medium-term.

    "This opens up opportunities for places that have advantages in terms of liveability and community, and where ‘price of success’ factors, such as housing affordability, are less of an issue.

    "The report sets out a series of recommendations for leaders from across national and local government, as well as the private and third sectors, as they plan their recovery strategies. This includes taking a broad approach to economic wellbeing and building resilience will be essential to create liveable vibrant places where people want to live, work and visit.”

    Source: Written from press release

    About the author

    An article that is attributed to Sync NI Team has either involved multiple authors, written by a contributor or the main body of content is from a press release.

    Got a news-related tip you’d like to see covered on Sync NI? Email the editorial team for our consideration.

    Sign up now for a FREE weekly newsletter showcasing the latest news, jobs and events in NI’s tech sector.

Share this story