North-South divide takes its toll on the economy

The continuing number of economic disparities between the North and South of England are highlighted in the latest Quarterly Economic Outlook (QEO) published today by New Economy.

Applying the latest data available, Greater Manchester’s QEO shows that although employment increased in the private sector in the North by 1.2% between 1998 and 2008, the South experienced a significantly larger increase of 7.1%.

The report shows that although Gross Value Added (GVA) grew over the same period by 61.4% in the North, a faster growth in the South of 85.5% meant the contribution of the North to national GVA actually fell from 42.6% in 1997 to 39.2% in 2008.

The authoritative QEO assesses Greater Manchester’s current economic climate – in a national context – based on the latest intelligence available on area, unemployment, house prices and the property market.

At a local level, the data reveals that Greater Manchester performs well when its economic output is compared to other parts of the North. In 2008, Greater Manchester’s total GVA was £47.7 billion – higher than England’s entire North East region, which contributed a GVA of £40.1 billion.

Of Greater Manchester’s total economic output, £32.2 billion of GVA was contributed by the South of the region, which is on a par with high-performing South East England, while just £15.5 billion came from the Northern part of the conurbation.

Baron Frankal, director of economic strategy at New Economy, said: “Though it is simplistic to talk about the “North-South” divide, the differences outlined in Greater Manchester’s Quarterly Economic Outlook highlight a need for Manchester to maintain and strengthen its position as an economic hub for the North.

“The gap has widened remorselessly over the last years, and continues to do so. Manchester is the strongest economic engine outside the capital if the Government is serious about rebalancing; this is the first place that it needs to do real business.”

Download the latest Quarterly Economic Outlook (98kb)