Restaurants heat up Cardiff economy but other areas struggle

Wahaca restaurant food

Cardiff's service sector appears to be booming with one estate agent claiming more than 60 restaurant firms want to open in the Welsh capital.

But a finance expert said the growth needs to reach other parts of Wales.

Chris Parry, from Cardiff Metropolitan University, has called for a "northern powerhouse" and "mid Wales powerhouse" in a bid to boost other areas.

It came as GDP figures for the UK showed a slower growth for the economy than predicted.

There are no separate Gross Domestic Product (GDP) figures for Wales. The best guide is using GVA - Gross Value Added - which is in effect GDP minus taxation and those figures are expected before the end of the year.

Cardiff is the only part of Wales that has GVA above the UK average.

The service sector now accounts for more than three quarters of economic output in the UK.

The Office for National Statistics (ONS) which produces the GDP figures said there had been a "robust" growth in the service sector - a quarterly increase of 0.7% - but both manufacturing and construction output had shown falls.

Mr Parry said: "In Cardiff and the surrounding areas it's showing signs of being really good.

'More than drinking coffee'

"When you move north and east of Cardiff it's still struggling a little.

"To really get a balanced economy in Wales we need to be doing more than drinking coffee but doing renovations to our homes, decorating, that sort of stuff."

Phil Morris, partner with EJ Hales property agents, said the companies wanting to open restaurants in Cardiff city centre are mainly from London.

He said Cardiff is now in "tier one" of the cities that London restaurants want to locate to.


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Media captionRestaurant manager Megan Roberts said business had exceeded expectations

Wahaca opened its first Mexican restaurant outside London in Cardiff city centre, serving around 5,000 people a week.

Manager Megan Roberts said: "People in Cardiff are eating and drinking out, it's becoming a social occasion more than going out binge drinking or whatever.

"We always hoped it would take off, but never imagined it would be so busy and so successful."

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Media captionRichard Morris, managing director of Tortilla, opened in Cardiff last month and says the city is booming

Tortilla's UK managing director Richard Morris opened up a Cardiff restaurant at the start of the Rugby World Cup.

"We're growing every day and every weekend," he said.

He said choosing Cardiff was a "no brainer" given the numbers of office workers and students.

But he said the sector was already moving to cities like Swansea too.

Robert Peston: No growth without services

Mr Parry said professionals in financial and legal services and students who put a lot into the economy.

"There's good gross income in Cardiff. It's rising as well, not as much as in London and the other big cities but it's growing," he added.

Wages are picking up and job security is improving in the city but he said Wales' service sector was struggling to pick up as a whole.

"The challenge for the sector is to say it's not just about Cardiff but the rest of Wales which is something Ireland did quite well," he said.

"In Wales we need to develop a northern powerhouse and a mid Wales powerhouse in the country."


Image caption D&M in Merthyr has benefited from the service sector in south east England

D and M in Merthyr Tydfil employs 25 people making metals used in railings and road building.


When the recession hit Welsh manufacturing hard, the firm turned its attention to the service sector in the south east of England, making shelves for supermarkets and bakeries.

Managing director Phil Corke says the supermarket contracts have slowed down but still represent one third of his companies work.

Generally across the UK he thinks the economy is doing reasonably well.

"It was really bubbling a couple of months ago, it's a little bit slower at the moment," he said.

"We're in so many different markets that really something is always up with us. You have to go out there and tell customers what you do and deliver that."

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