Cardiff is the economic powerhouse of Wales, playing a vital role in creating jobs and wealth for the people of the city and the wider city region.
The city economy is demonstrating strong performance across a number of headline indicators, with jobs growth up, unemployment down, visitor numbers up and growth in the number of new companies created.
That said, Cardiff’s total economic output (GVA) – what we could think of as the city’s ‘GDP’ – although much higher than other parts of Wales, compares relatively poorly to the top performing major British cities. After 10 years of continual growth in the years preceding the economic crash, economic output per capita is only now returning to pre-crisis levels.
Together, these figures suggest that while jobs are being created, the city’s economy is not becoming more productive. To meet the demands of growth it will be important that Cardiff’s economy not only keeps on creating and attracting new companies and new jobs, but that these companies are more productive and the jobs better paid.
The proceeds of economic growth have not been felt by all of the city’s residents. Despite the jobs created and the investment in the city centre, many of the poorest communities in Wales can be found in its capital city. The large disparities in levels of unemployment, household poverty and workless households closely align with health, crime and educational inequalities across the city.
Global trends indicate that cities will be where the majority of population and economic growth can be expected to take place in the 21st Century, and where new jobs, smart businesses and highly educated and skilled people will be increasingly concentrated. These trends are also evident in Wales, with the majority of the growth in new jobs and businesses in the Cardiff Capital Region taking place in the capital city.
Cardiff’s development has over the last twenty years focused on improving quality of life, attracting talented people to live and work in the city, alongside attracting businesses and increasing tourism. Underpinning this have been major investments in sports stadia and cultural venues, and the hosting of major national and international sporting and cultural events. The city must continue to make the most of these economic assets. The Champions League Final will be coming to Cardiff in 2017 and the Volvo Round the World Yacht Race in 2019.
In order to increase productivity, the city economy needs to shift towards attracting and creating higher value businesses. Given the high skill levels and the presence of three universities in the city the raw materials for making progress are there. The momentum seen in both the Central Square development and in Cardiff University’s Innovation System indicate that this shift is beginning to take place.
The city’s economic growth has not been felt by all residents and communities. Unemployment remains too high and levels of household income remains low in many parts of the city (see Outcome 7). Given the role income plays in all forms of deprivation, there needs to be inclusive growth across Cardiff and the city region. Education and skills for all will be a priority, as will ensuring that job creation strategies, skills programmes and regeneration projects are developed and implemented cohesively.
Connecting the jobs created in the city to residents of the wider city region will be a priority for Cardiff and for Wales. The Cardiff Capital Region City Deal, the associated delivery of the Cardiff Metro and the establishment of effective city-regional governance, will be fundamentally important in delivering sustainable, inclusive economic growth.