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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FEBRUARY/MARCH 2011

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A positive start to the New Year, but there are challenges to come

Last month brought the shock that GDP fell by 0.5% nationally in Q4 2010. This month brings the shock that national performance was worse than we thought: the economy is now thought to have shrunk by 0.6% in Q4 2010. However, amid a backdrop of national gloom, the Manchester Monitor finds that Greater Manchester’s economy performed relatively strongly as it moved in to 2011.

The jobseeker’s allowance claimant count saw a seasonal rise of 5.8% in January – not a surprise as the claimant count has increased every January in GM since records begin in 1984. More importantly this was an 11.5% year on year decrease, ahead of the national decrease of 9.5. Employers also appear to have picked up their recruitment with the number of vacancies reported to Jobcentre Plus up a quarter (24.7) on January 2010.

The healthier labour market should support a reduction in landlord and mortgage repossessions in coming months. Both of these measures fell in the last quarter of 2010 (although mortgage possession claims were still up 4.3% on the year) and over the whole of 2010 claims were 14.2% lower than the whole of 2009. The residual strength in the labour market also appears to be supporting a relatively healthy retail market with figures released by CityCo suggesting that both retail spend and footfall increased on the year in Manchester city centre, against a backdrop of annual decreases nationally.

Businesses also saw a positive start to the New Year. Despite the expectation of reduced employment prospects in the first quarter of 2011 – as indicated by Greater Manchester Chamber’s Quarterly Economic Survey in December – most real indicators are positive for Greater Manchester. The number of business deals is up both on the month and on the year, in comparison to falling numbers of deals nationally.

Businesses in Greater Manchester are also considered to be less risky than either last month or last year, and the number of high-risk businesses has fallen by 0.5% in January. Fewer businesses are winding up, with Q4 2010 showing the lowest level seen since early 2007 as a result of a fall of 23.5% on the year, significantly faster than the 6.0% reduction seen nationally.

Bankruptcies – both debtor and creditor – are similarly seeing reductions across Greater Manchester. Creditor bankruptcies, in particular, are falling despite an increase nationally.

Not all indicators were positive however. Hotel occupancy was down 0.9% on the year and, while both flights and passenger numbers at Manchester Airport have seen an annual increase, they were still lower in December 2010 than they were in December 2008. House prices in Greater Manchester have also seen a dip – down 0.4% on the month and down 0.1% on the year – driven by a low number of buyers in the market.

In sum, Greater Manchester’s economy has started 2011 in good shape. However, there are significant challenges on the horizon. Events in North Africa and the Middle East are expected to push the price of oil and other commodities higher, the public sector cuts will hit in earnest in April with a knock-on dampening of demand, and there is increased pressure for interest rates to rise soon. Greater Manchester looks capable of handling these challenges, but expect some turbulence.

You can find more detailed analysis and the data throughout the Manchester Monitor for February/March 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.