Economy and industry of Cardiff

As the capital city of Wales, Cardiff is the main engine of growth in the Welsh economy; the city "has been developing as a significant service centre and economic driver for the wider south east Wales economy". The city and the adjoining Vale of Glamorgan (which is part of Cardiff's Travel to Work Area) contribute a disproportionately high share of economic output in Wales.

Economic Data

Trend of regional gross value added of Cardiff and the Vale at basic prices 1995 - 2003.
(figures in millions of British Pounds Sterling)

Year	Regional GVA	Agriculture	Industry	Services
1995	4,753	11	1,110	3,632
2000	6,584	10	1,302	5,277
2003	8,201	11	1,374	6,816

The economy of Cardiff and adjacent areas makes up nearly 20% of Welsh GDP and 40% of the city’s workforce are daily in-commuters from the surrounding south Wales area.

Total employment in Cardiff rose from 149,000 in 1991 to 176,700 in 2005, and has been growing at around 2005 per annum in recent years, almost double the rate across Great Britain (1.3%). In addition, an estimated 18,000 people are self-employed, taking the total workforce to around 194,000. Following the decline of the city’s heavy industry in the latter part of the 20th century, the economy of Cardiff is now dominated by the service sector (see table of employment by industry below) with just 9% of employees – 15,650 individuals – engaged in manufacturing activities.

Public administration, education and health is the largest sector in Cardiff, providing employment for 32% of the city’s workforce. Cardiff is the main financial and business services centre in Wales and as such, the sector provides employment for 20% of the city’s workforce. This sector, combined with the Public Administration, Education and Health sectors, have accounted for around 75% of Cardiff's economic growth since 1991.

One in five employees (20.4%) in Cardiff are based in the distribution, hotels and restaurants sector, highlighting the growing retail and tourism industries in the city. A major £675 million regeneration programme for Cardiff's St. David's Centre is currently underway which, when completed in 2009, will provide a total of of shopping space, making it one of the largest shopping centres in the United Kingdom.

The city has an estimated unemployment rate of 3.0% - although this represents a slight increase from the 2.2% recorded in 2004, it still compares favourably with the Wales average of 5.2% and the United Kingdom average of 9.3%.

In 2005, Cardiff and the Vale of Glamorgan had a GDP of £8.978 billion GBP. In the same year, Gross Value Added per head was £20,577, 115% of the UK average or 149% of the Welsh average.

Industry

Since the 19th century, a number of differing industries have shaped the city, and continue to do so today.

Coal

What transformed Cardiff into a big city was the demand for coal required in making iron and later steel, brought to the sea by packhorse from Merthyr Tydfil. The Ironmasters, the proprietors of the smelters in Dowlais and Merthyr, wanted to reduce the cost of carrying iron by road to ships berthed in the estuary of the River Taff at Cardiff. They sought permission of Parliament to build a long canal from Merthyr (510 feet above sea-level) to the Taff Estuary at Cardiff.

Work on building the Glamorganshire Canal began in 1790, took eight years and involved installing 50 locks. The Cardiff Sea Lock, which enabled barges to unload iron into sea-going ships, was built at Harrowby Street (Harrowby - a Viking place-name - had been the original Norse trading post in Cardiff). Eventually the Taff Vale Railway replaced the canal barges and massive marshalling yards sprang up as new docks were developed in Cardiff - all prompted by the soaring world-wide demand for south Wales coal. By 1907 Cardiff's docks had of quayage, one of the largest dock systems in the world at that time.

Cardiff's port, known as Tiger Bay, became - for some time - the world's most important coal port, and for a few years before World War I the tonnage handled at the port outstripped London and Liverpool (however, some statistical tables conflate Barry and Penarth trade figures with Cardiff's, so the role of the coal port can be inflated). In 1907, Cardiff's Coal Exchange was the first host to a business deal for a million pounds Sterling.

Competition from the new docks at Barry from the 1890s, and falling demand for Welsh coal during the interwar period, contributed to the decline of the port. By the 1980s large areas of Cardiff docks were derelict, and a regeneration project that eventually transformed South Cardiff began.

Steel

The construction of the East Moors Steelworks, known as 'Dowlais by the Sea', established Cardiff as a major steelmaking centre in the 1890s and was the first example of the Welsh industry's move from inland to coastal locations. The plant's main products were steel plates for shipbuilding (though it did not provide the hoped-for stimulus for a local shipbuilding industry) and by the 1930s it was manufacturing half a million tons of steel per year. Although the East Moors works closed in 1978, steel production continues in Cardiff at the Celsa Steel UK plant in Cardiff Bay, which produces reinforcing bars and wire.

Retail

Retail also plays a strong role in the city's employment, with it being listed as being the 6th best place to shop in the UK according to recent surveys. The majority of Cardiff's shopping portfolio is in the city centre around Queen Street and St. Mary's Street. There are also numerous suburban retail parks serving the city.

Cardiff retail sector is dominated by three main shopping arcades located in the city centre; St. David's Centre, Queens Arcade and the Capitol Centre. The current expansion of St. David's Centre as part of the St. David's 2 project is allowing a huge piece of land between The Hayes and Charles Street to be demolished and redeveloped, bringing around 200 shops, flats and a John Lewis department store to the city. This will more than double the available floor space, making it one of the largest shopping centres in the United Kingdom. As well as these modern shopping arcades, the city is still home to many Victorian shopping arcades, such as High Street Arcade, Castle Arcade, Wyndham Arcade, Royal Arcade and Morgan Arcade.

There are two main shopping streets in the city centre. Queen Street is home to the main chain stores such as Topshop, Topman, Boots, Gap, Dorothy Perkins, Primark, and Zara to name a few. The second main street, St. Mary Street and High Street, is home to Wales' oldest and largest department store, Howells and is also home to smaller independent stores. Also of note is The Hayes, home to Spillers Records, which was established in 1894 and is officially recognised as the world's oldest record shop. The city is also host to S A Brain, a brewery with premises in Cardiff since 1882. The current brewery is located next to Central Station.

Cardiff has a number of markets: these include the vast Victorian indoor Cardiff Market, Splott Market, a newly-established Riverside Community Market (which specialises in locally-produced organic produce), and a smaller 'fruit & veg' style St. David's Market on Barrack Lane which will be improved with the coming of St. David's 2.

Several out-of-town retail parks also exist, in locations such as Newport Road, Culverhouse Cross, Cardiff Gate and Cardiff Bay.

There have been a number of issues relating to city centre shopping, most recently the cost of parking in the city centre and the experimental banning of private cars on St. Mary's Street. Both have been heavily criticised by some sectors of the media, public and retailers.

Finance

Today, Cardiff is the principal finance and business services centre in Wales, and as such there is a strong representation of finance and business services in the local economy. In December 2003, 33,850 individuals were employed in the sector - higher than the proportion across both Wales (9.6%) and Great Britain (15.4%) . The city was recently placed seventh overall in the top 50 European cities in the fDI 2008 Cities of the Future list published by the Foreign Direct Invester (FDI) magazine, and also ranked seventh in terms of attracting foreign investment.

Legal & General, Admiral Insurance, HBOS, Zurich, ING Direct, The AA, Principality Building Society, 118118, British Gas, Brains, SWALEC Energy and BT (based in Stadium House) all operate large contact centres in the city, many based in Cardiff's office towers such as Capital Tower and Brunel House. Other major employers include NHS Wales and the National Assembly for Wales.

Media

Cardiff is home to the Welsh media and the UK's largest film, TV & multimedia sector outside London with BBC Wales, S4C and ITV Wales all having studios in the city. Employment in the sector has grown significantly in recent years, and currently provides employment for 2.1% of the city's workforce - higher than the level across Wales (1.1%) and marginally lower than that across Great Britain as a whole (2.2%). Red Dragon FM, Real Radio, BBC Radio Wales and Radio Cymru all have their main studios in Cardiff.

Tourism

Cardiff's top tourist attractions (2006)

Attraction	No of Visitors
St Fagans National History Museum	588,560
National Museum	291,050
Cardiff Cathedral	275,000
Wales Millennium Centre	244,139
Cardiff Castle	231,489
Techniquest	182,034

Cardiff is the one of the most popular tourist destination cities in the United Kingdom, with one survey recording just under 12 million visitors in 2006. Cardiff's top attraction is the St Fagans National History Museum, which in 2006 recorded almost 600,000 visitors, ahead of the National Museum, the Wales Millennium Centre and Cardiff Castle. In addition, Cardiff's status as the location of the Millennium Stadium means that the city receives influxes of anything up to 100,000 visitors during major sporting events such as Six Nations rugby matches.

There are a large number of hotels within the city, most notably the five-star Hilton hotel in the city centre, and St David's Hotel & Spa located in Cardiff Bay. Hotels operated by Copthorne and Marriott are also located in Cardiff, along with numerous smaller hotels, bed and breakfasts and hostels. These are mainly located on St Mary's Street, Newport Road and the Taff Embankment opposite the Millennium Stadium. In total, the city's hotels have almost 9,000 available bed spaces.

Property & development

Cardiff is currently enjoying several regeneration projects like the £270 million International Sports Village in Cardiff Bay which will play a part in London 2012 Olympics. It features the only olympic-standard swimming pool in Wales, the Cardiff International Swimming Pool, which opened on 12 January 2008.

The Tiger Bay area also housed one of the UK's earliest non-white immigrant communities. After a long period of neglect as Cardiff Bay, it is now being regenerated as a popular area for arts, entertainment and nightlife. Much of the growth has been thanks to the building of the Cardiff Barrage.

Two large international business parks are planned for the north of Cardiff, the largest being at Thornhill which may include the building of a new junction on the M4 motorway, the other being at junction 33.

The average house price in Cardiff is £181,226, which represents a drop of -0.5% since last year. Cardiff has a strong rental market, particularly in the city centre and Cardiff Bay where house rentals are almost double the national average and the number of total transactions exceeds the total number of properties.

References