Employment outlook gloomy for 2012, but could be worse says New Economy

Greater Manchester (GM) is to face another year of all-round challenges in 2012 but it could be worse in terms of unemployment – that is the key message published in New Economy’s latest Quarterly Economic Outlook (QEO).

The QEO analyses economic trends across GM, including unemployment, house prices, business statistics and the commercial property market. Using the latest available data, it outlines that as a result of the 2008 recession and the ongoing UK economic turndown, the total number of people out of work as of November 2011 sits at almost 82,000.

This figure represents almost 10,000 additional Jobseeker Allowance (JSA) claimants in GM compared to 12 months ago, however the current situation is less severe than previous recessions in the early 1970s, 1980s and 1990s.

Baron Frankal, director of economic strategy at New Economy, said: “There has been a substantial increase in unemployment since the start of the recession, which has had a major impact upon our residents, but it is nothing like the rise seen in the early 1980s recession when unemployment more than doubled.

“The current figure is also lower than at comparable times in the cycle during both the early 1970s and early 1990s recessions. There is no single reason for this but evidence suggests labour hoarding by employers; a decline in the number of hours worked; and a decline in real wages, thereby reducing pressure for employers to make redundancies. This of course is the same wage restraint that is holding back domestic demand in GM households.”

Despite unemployment trends standing up well in comparison to previous recessions, it is still critical that new opportunities in the labour market are created. The latest Greater Manchester Forecasting Model (GMFM) produced by Oxford Economics therefore offers a positive outlook as it indicates that up to 100,000 new jobs could be created within GM between 2012-22.*

Today New Economy also publishes January’s Manchester Monitor, the authoritative monthly snapshot of the wellbeing of Greater Manchester’s economy.

The Manchester Monitor research reiterates the message that 2012 will be a difficult year for GM, with increasing unemployment and a second year of business deaths outnumbering business births in GM – trends which are both repeated across the UK.

However, the analysis also reveals that companies in GM are proving resilient to the challenging economic backdrop; that Manchester Airport is reporting an increase in passenger numbers – up to 1.683M in October 2011 compared to 1.638M 12 months earlier, which is a 2.8% annual increase; and that hotel occupancy in Manchester City Centre has reached new heights, with year-on-year occupancy rates up from 80.3% in November 2010 to 84.0% in November 2011.