Nearly 8,000 jobs could be lost in Aberdeen as a result of the Covid-19 crisis, with more than 750 city businesses at “immediate risk” of failing, according to the findings of new research.
Despite the shocking scale of the predicted figures, one of the study’s authors last night claimed the Granite City would be better off than most in the UK.
The head of Aberdeen and Grampian Chamber of Commerce (AGCC) said the numbers underlined the price businesses and their employees were paying for continuing high levels of coronavirus cases.
The research, into the economic impact of the Covid-19 lockdown on the UK’s 100 largest cities and towns, was carried out by Ross Brown and Marc Cowling, business professors at St Andrews University and Derby University respectively.
753 Aberdeen businesses at ‘immediate risk of failing’
They concluded 753 businesses in Aberdeen were at “immediate risk of failing as they run out of cash”.
“This scale of business failures in Aberdeen city would put 9,932 workers into unemployment with little chance of finding a new job,” they added.
The academics’ study was based on analysis of figures gathered before the onset of the pandemic, on profits generated by companies and what they did with it. Those that earned little or no profit were identified as at “extreme risk” of running out of cash, along with firms that achieved a financial surplus but did not save it.
Mr Cowling said: “In terms of the proportion of the population at risk, Aberdeen was a ‘medium-to-good’ spot.
“That suggests that in the structure of the business population Aberdeen had a lower proportion of the most at risk, which are micro and small businesses. Aberdeen, in a relative sense, is in a fairly decent position on the job losses too.”
He added: “The immediate consequences of the Covid-19 crisis on the economies of our cities and towns will be extremely severe at a time when people are already struggling to make ends meet and pay their bills.”
Calls for review of Covid framework
Last night AGCC chief executive, Russell Borthwick, said: “Businesses, the economy and the jobs they support are paying the price for the continued levels of case numbers that are being seen across the country and although support schemes remain in place for now, they do not begin to cover the costs of businesses forced to mothball or remain open with limited custom.
“Although it is right to regularly review restrictions, the Strategic Framework in its current form is failing to create the certainty that businesses and their customers need.
“We believe the Scottish Government must urgently undertake a further review of the framework with the aim of publishing a refreshed plan for re-opening the economy, similar to the original route-map following the national lockdown and setting out a clear timetable for the reopening of vital sectors.
“As we move into 2021, our governments must begin to trust businesses as part of the solution to getting our economy back on track rather than as places that are treated as the cause of the spread of the infection.”
Among Scottish cities, the prognosis from the academic study was worst for Dundee, which, it was predicted, could suffer the highest proportion of business failures in the UK.