The Manchester Monitor is a dashboard of Greater Manchester specific data and indicators designed to provide a monthly analytical snapshot of the economic wellbeing of the city region.

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JANUARY 2010
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The headline economic indicators for January 2010 find Manchester holding its own in a very challenging economic climate, with the risks to growth on the downside for a prolonged period.

Manchester is not an island and, as UK’s second largest concentration of economic activity, the current economic malaise weighs heavily on the city region. Little comfort can be taken from the UK formally coming out of recession at the end of 2009: the leap in inflation augers badly and the consequences of the coming fiscal contraction are likely to be profound, making the risk of prolonged stagnation very real.

Relative to other UK locations however, the new year finds Manchester in a robust state. In particular, labour market performance was strong, with latest figures (December 2009) showing a 1% fall in jobseekers, a third consecutive month of decreases. Total unemployment also fell across the city region – at a greater rate than across the UK. This is likely due to the differences in occupational make-up of the city region. These types of jobs – i.e. the urban concentration of service sector jobs such as retail – are proving more resillient.

The property market also shows positive signs: average house prices have risen 1.7% since their low of £107,589 in June 2009, and new construction orders in Q2 2009 are also up. The trend however is shaky: home sales are likely artificially inflated by purchases being brought forward to avoid a stamp duty rise, and the large public sector capital investment construction orders seen last quarter are unsustainable.

The Manchester Monitor Index of the city region’s listed firms shows a reversal of six months of falling prices. However, these firms performed less well than the FTSE All-Share Average and the FTSE 100. Manchester mergers and acquisitions have slowed, with only six deals in December 2009. This is a higher fall than the UK and South East rate, raising the possibility that M&A activity has further concentrated in London during the recession. Hotel occupancy rates however show a healthy annual increase, and forward bookings are also high. This chimes with Manchester’s placing as the top UK city in the Economist Intelligence Unit’s latest “liveability” rankings.

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worklessness
MONITOR
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Labour market performance was strong, with a 1% fall in the number of jobseeker’s allowance claimants in December 2009. This was only the fourth time in the past 18 months that claimant numbers have gone down, and was the third consecutive month of decreases. More positively still, total unemployment – which differs from the claimant count as not all unemployed people claim benefit – also fell across the city region (in contrast to a smaller decrease across the rest of the UK), the second time it has done so since the start of the recession in late-2008. This is likely due to Manchester’s relative occupational mix – new job opportunities in sales and business services in relatively urban areas such as Manchester have been offset by those in rural areas of the UK not able to attain these jobs. However, there is an element of seasonality in the data, as people take up temporary work opportunities over the Christmas period. Unemployment is likely to start to rise again in early 2010 as these seasonal shifts take hold before levelling off later in the year.

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business
MONITOR
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Business indicators suggest that the city region’s recovery is still tentative. The Manchester Monitor Index charts rising stock prices for the city region’s listed firms, a reversal of falling prices in the first half of the year. However, the city region’s listed firms haven’t performed at the same level as either the FTSE All-Share average or the FTSE 100. Further, the number of mergers and acquisitions in Greater Manchester has slowed, with only six deals in December 2009 – an annual fall of around 73%. This fall is higher than the UK rate, suggesting that the concentration of merger and acquisition activity in London is potentially increasing.

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economic
MONITOR
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The headline indicators showed encouraging signs for the property market. House prices across the city region were up to £109,443 from a low of £107,589 in June 2009, and new construction orders in Q2 of 2009 showed a significant boost. However, beneath the surface the recovery seems less secure. Home sales may have been artificially inflated by buyers bringing purchases forward into 2009 to avoid the rise in stamp duty from 1st January 2010. Also, the rise in construction orders was inflated by large public sector capital investments, which are unlikely to be able to sustain the economy over the medium-term.

Other economic indicators paint a tentatively positive picture. Air traffic movements are down, but this is likely to have been influenced by Ryanair pulling out of Manchester, as well as fewer UK residents travelling to the Euro Area. Hotel occupancy rates show an annual increase, up to 76% in November 2009, and forward bookings for December were up as well, to 59%.

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For more information on the Manchester Monitor, contact Chris Pope:
t: 0161 237 4024
e: Chris Pope

All data contained in the Manchester Monitor, and all Monitor-related reports, has been compiled by New Economy from a range of sources and is published for general information purposes only. While every effort has been made to ensure the accuracy of the data and other material contained in this report, the Commission for the New Economy does not accept any liability (whether in contract, tort or otherwise) to any person for any loss or damage suffered as a result of any errors or omissions. The information, opinions and forecasts set out in the report should not be relied upon to replace professional advice on specific matters, and no responsibility for loss occasioned to any person acting, or refraining from acting, as a result of any material in this publication can be accepted by the Commission for the New Economy.