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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NOVEMBER 2011

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Economy remains fragile but GM forecast to lead a North West recovery

November got off to a positive start with the latest GDP figures for the UK showing the economy grew by 0.5% for the third quarter of 2011. This was higher than many economists had expected and was driven by growth in the services sector, in which GM is particularly strong. However, despite the latest GDP estimate representing an improvement on the figure of 0.1% recorded for Q2 2011, serious fears remain about the prospects for the UK economy, especially in light of the continuing eurozone crisis. The National Institute of Economic and Social Research has gone as to far to claim that the UK has a 70% chance of recession if policymakers fail to resolve the eurozone crisis, but that even if governments and central bankers do resolve the debt saga the UK still faces a 50% risk of recession.

A number of sectors are still operating in extremely tough conditions. This includes retail, which is having to contend with reduced expenditure by consumers grappling with rising costs and squeezed incomes; and the manufacturing sector, which shrank unexpectedly in October. These difficulties have led to the Bank of England announcing a second round of quantitative easing, totalling £75 billion, to try and revive the economy.

The fragility of national and global economic conditions is reflected in GM in the latest figures on the number of people claiming Jobseekers Allowance, with the number of claimants growing by 7,800 in the 12 months to September 2011.

The housing market in GM remains quiet, with sales having been relatively flat since March this year. The commercial property market saw slightly lower levels of take-up during Q3 2011, though upcoming inward moves to GM will see Etihad and Aegis take more than 60,000 sq. ft of office space, creating over 700 new jobs.

Evidence is continuing to support the claim that GM’s international standing and external profile to visitors remain strong. In particular, the University of Manchester is now ranked in the top 50 global Higher Education institutions by The Times, while hotel occupancy rose significantly in September 2011 to more than 80.0. In addition, the Arndale Centre recently announced that their footfall for January–July this year had reached 18.9 million, an annual rise of 6.8. Passenger numbers at Manchester Airport, which has just been named Airport of the Year for the fourth year in a row, also continued to grow, increasing to nearly 2.2 million in August 2011.

Looking to the future, the 2011 update of the GM Forecasting Model (GMFM) has been released. Significantly, the model shows that over 100,000 additional jobs are expected to be created over the next decade in GM, with financial & business services the key growth sector. This actually represents nearly two thirds of the 157,000 jobs forecast to be created in the North West over the next decade. So whilst the data this month continue to show how challenging the labour market is, GMFM shows that GM has outperformed the UK economy as a whole and is well placed to lead recovery in the North West over the coming decade. With the welcome announcement that GM has been successful in securing the majority of funding it bid for in the second round of the Regional Growth Fund, totalling £60 million, it is now vital that opportunities for growth are created right across the conurbation.

You can find more detailed analysis and the data throughout the Manchester Monitor for November 2011:

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DISCLAIMER

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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.