A new report released by commercial real estate firm Avison Young has revealed that Cardiff is the fastest growing core city in the UK, with the Welsh capital’s population set to increase by 20% over the next 20 years and its economy forecast to grow by 7.2% by 2028.
This substantial projected growth is led in part by the city’s three universities, which continue to attract up to 70,000 students per year and represent a significant opportunity to retain talent for Cardiff’s growth sectors, which include science and technology and information and communication.
It is estimated that Cardiff University alone generated £3.7 billion of economic output in 2020-21, compared to an operating cost of £573 million. This output includes £883 million from research and knowledge sharing, which is boosting the city’s science and technology economy, a sector which is set to grow by 6.6% over the next five years.
Data from Oxford Economics, which appears within Avison Young’s report, also found that Cardiff University saw 164 spinout companies created between 2020-21, including start-ups established by staff and graduates.
This coincides with a particularly positive outlook for the city’s labour market. Over the next five years, job growth is forecast at 3.7%, compared to 2.4% for Wales and 3.1% for the UK as a whole, driven primarily by growth in the professional, scientific and technical services sector (6.6%) and the information and communication sector (4.4%).
Cardiff’s information and communication sector has also seen considerable employment growth over the last 10 years, with a 126% increase in employment within the sector, which made it the fastest growing sector of any UK city in the last decade. Now, this trajectory of growth is set to continue, enabled by the city’s university population and graduate retention rate.
With a population boom, continued economic growth and the creation of new employment opportunities on the horizon for Cardiff, the requirement for the accelerated delivery of housing will also come to the fore. Between 2006 and 2023, a total of 21,323 new dwellings were delivered, which equated to only 52% of the requirement. Ongoing large-scale regeneration projects, including Central Quay and Atlantic Wharf, are expected to help address this shortfall.
Other notable ongoing projects which are supporting the delivery of improved infrastructure within the city include Cardiff Crossrail, which received £50m in Levelling Up funding last November, and Cardiff Parkway, a planned new railway station in the east of the city.
The launch of Avison Young’s Cardiff Outlook report was preceded by an event in the city on 24th January, featuring panel discussions with key regional decision-makers chaired by Andrew Gibson, Director at Avison Young, on the current and emerging growth opportunities in the Welsh capital.
Peter Constantine, Regional Managing Director for Cardiff at Avison Young UK, said:
“We’ve seen considerable growth in Cardiff over the last decade and it is apparent that this growth is set to continue – in large part due to the vibrancy of our city’s knowledge and professional sectors, such as science and technology, bolstered by the strength of our universities.
“Investment in infrastructure will also form a key part of Cardiff’s path to economic growth, as well as the creation of new housing to facilitate our anticipated employment spike – and our priority sectors will benefit immensely from enhanced connectivity to the wider region and the rest of the UK, setting the city up for a prosperous future.”
Leigh Hughes, Chairman at Cardiff Capital Region Employment and Skills Board, said:
“One of the drivers of success for our regional strategy, and a key inward investment message, is the strength of our skills and talent pipeline. An interesting mix of growth sectors, including fintech, creative industries and medtech, as well as public and private sector investment, underpins how we leverage money to support growth, invest in digital infrastructure and develop the spaces needed for these types of businesses to grow.
“The Cardiff Investment Zone presents a huge opportunity to create partnerships that push projects forward and enhance the region’s reputation as a business location. We’re keen to collaborate with the private sector to unlock, amplify and leverage that investment.”
Helen Thomas, Head of Property, Wales and Short Sea Ports, at Associated British Ports, said:
“Across our five Welsh ports we have 600 acres of development land. Each location has a range of opportunities to contribute to the region’s growth agenda and we’re steadfast in our commitment to respond to the demands to decarbonise. With a range of green energy initiatives, from hydrogen to carbon capture and storage, and a multi-modal offer we are actively exploring and embracing ideas and locations suitable for a future-facing city.”
Nick Harris, Director at Litmus Properties, said:
“The new arena is a great example of a public-private partnership that has acted as a catalyst for the four phases of the Atlantic Wharf masterplan. We’re excited about the continuity and connectivity we’re going to be able to deliver, and the social value we can create through the lifecycle of the project in the form of jobs and skills.”