Almost £16billion of investment to flow into North-east over next decade

Almost £16billion of investment will be poured into the Northeast economy over the next decade, according to new research.

The 6th edition of Investment Tracker - published by Aberdeen & Grampian Chamber of Commerce - shows record levels of investment coming into the Aberdeen city region between now and 2033.

On top of £6.5billion worth of projects already delivered since the report was launched in 2016, further infrastructure and regeneration activities totalling £15.9billion is in the pipeline.

The new report, which has been published in partnership with Invest Aberdeen and Opportunity North East, includes:

• £780million in planned innovation and infrastructure projects as part of the City Region Deal, including £200million earmarked for speeding up rail travel times between the North-east and the central belt.

• £315million worth of investment in the region’s town and city centres, including the new international food market under construction on Union Street.

• £4.2billion worth of transport projects, including ambitious £250million plans to construct a rapid transit scheme in Aberdeen.

• Commercial and residential developments worth £1.75billion, including a £200million plan to expand Union Square, the £30million Denholm Seafoods fish processing facility and the £137.5million Cloverhill housing development at the Bridge of Don.

• A further £403million is being invested in schools throughout the region as part of a near £1billion investment in health and education.

• £368million is being invested in sport, leisure and culture, including £32million developing adventure tourism in the region.

• And £7.45billion is being invested in energy projects across the region, including £1billion+ in the Kintore Hydrogen project alone.

Projects now delivered since the last tracker include the £420million South Harbour development at the Port of Aberdeen, which will be central to Scotland’s energy transition plans, and the ONE BioHub, which will create a unique life sciences ecosystem for research and development in Aberdeen.

Commenting on the launch of the 6th edition of the Investment Tracker, Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: “Since the first in the series was published in 2016, the tracker has demonstrated, at-a-glance, the exciting plans for our city region - it shows that this area has big ambitions for the future and that rumours of the demise of the place that has become Europe’s oil capital are greatly exaggerated.

“Our economy remains strong, with Aberdeen consistently ranking in the UK top 10 for foreign direct investment, regional GVA per capita, and average earnings that are among the UK’s highest. So, if you are not already thinking about business opportunities in the Northeast of Scotland, you should be.

“We have the backing of both governments to become a globallysignificant renewable energy hub, building on 50 years of pioneering energy activities in the North Sea, protecting and creating tens of thousands of high-value jobs.

“At the same time, great progress continues to be made with the sector diversification strategy, stimulating new activities in our other key areas of strengthhealthcare, life sciences, digital technologies, food, drink, tourism, agriculture and fisheries.”

Jennifer Craw, CEO of Opportunity North East (ONE), said: “Northeast Scotland is confident about its place in the future economy. It has a clear purpose in diversification and achieving a just transition to a net zero economy.

“The approach to economic transformation pioneered here has identified, developed, secured funding and delivered transformational projects with private sector leadership to boost growth and productivity in established and emerging industries.

“Opportunity North East (ONE), Aberdeen City Council and Aberdeenshire Council, working with partners including Scottish Enterprise, have established an exemplar model for private and public sector regional economic development.

“The message is clear; more investment here will deliver outcomes with a national economic reach. ONE is entering a new investment phase, and, with the right investment, is excited about how much more this region can achieve.”

Commenting on behalf of Invest Aberdeen, Aberdeenshire Council leader Mark Findlater said: “The Aberdeen city region, like many others, has experience significant economic challenges in recent years. However, despite global challenges and uncertainty, we continue to deliver transformational projects and attract investment across the key sectors of our economy.

“The 2023 Investment Tracker highlights that North-east Scotland is a region of innovation and ambition, and we continuously draw on our rich industrial, commercial and international heritage across all sectors. The tracker showcases the many projects due to be delivered under our ambitious investment pipeline.

“The Aberdeen city region is a diverse and vibrant corner of Scotland, with a wealth of skills and knowledge across a range of sectors. Now, more than ever, our focus must remain on maximising this potential and delivering new opportunities to the region.” www.agcc.co.uk/investment-tracker

Chancellor voices concern over home working impact

Jeremy Hunt has voiced concern about the impact home working is having on business creativity.

The Chancellor told business leaders that the “default” location for workers should be in the office unless there is a good reason to work from home.

Speaking at the British Chambers of Commerce Global Annual Conference in London, he said that, while working remotely had produced “exciting opportunities”, he was worried about “the loss of creativity” when it is permanent. “The default will be you work in the office unless there’s a good reason not to be in the office,” he said.

Flexible working has become the norm for many workers since the pandemic.

Mr Hunt said it was “something for businesses to find their own way through,” but added he believed the default for many would be to work from offices.

“I worry about the loss of creativity when people are permanently working from home and not having those water-cooler moments, where they bounce ideas off each other,” he added.

“I think that’s why businesses are saying they want people back unless there’s a reason.”

Mr Hunt admitted that there were “some very exciting opportunities created” by workers being able to use programmes like Zoom and Microsoft Teams to conduct meetings remotely.

He suggested that it helped parents with childcare and it also helped people with mobility issues.

The chancellor’s comments came after the boss of the BCC warned UK business needed a “fresh relationship” with the government.

Director-general Shevaun Haviland said it was a “pivotal moment for the voice of British business” with an election looming.

Opening the BCC’s annual conference, Ms Haviland said companies had been hit by “eye-watering” energy bills, rising interest rates and a “cripplingly tight labour market”.

Bank of England Chief warns of wage-price spiral

Andrew Bailey has admitted that the Bank of England is struggling to keep a lid on inflation.

Addressing business leaders at the British Chambers of Commerce Global Annual Conference in London, the Bank governor signalled that the UK faces a longer crisis than expected in the battle to tame inflation.

It comes as new data shows that private-sector wages grew by 7% in the three months to March, far higher than is consistent with the Bank’s 2% inflation target.

“Some of the strength in core inflation reflects the indirect effects of higher energy prices,” Mr Bailey said.

“But it also reflects second-round effects as the external shocks we have seen interact with the state of the domestic economy.”

His warning also suggests that inflation could take much longer to fall than initially expected, meaning interest rates would have to stay higher for longer.

Mr Bailey said: “While we expect CPI inflation to fall quite sharply as energy costs begin to ease, albeit at a somewhat slower pace than projected in February given the near-term outlook for food prices, the outlook for inflation further out is more uncertain and depends on the extent of persistence in wage and price setting.”

He said that, while there were signs of the labour market starting to loosen, it was happening more slowly than the Bank had predicted a few months ago.

The Bank has already raised interest rates 12 times to 4.5%. Mr Bailey said policymakers would have to lift borrowing costs further “if there were to be evidence of more persistent pressures”.

He added that “near-term indicators suggest that pay growth could ease further later this year”.

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