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.

---

APRIL 2011

---

Trouble ahead as business indicators start to dip and storm clouds gather

Nationally, we have had a rocky start to the year – with negative growth at the end of 2010 and falling consumer confidence. Although Greater Manchester’s economy performed relatively robustly over this period, the latest business indicators suggest that growth might be starting to stall. Coupled with rising global oil prices, international uncertainty over the impact of the Japanese earthquake, and the prospect of an imminent increase in the Eurozone interest rate (which, alongside persistently high inflation, will put pressure on the Bank of England to increase the UK base rate), the prospect of a prolonged slowdown has markedly increased.

Leading business indicators suggest that business conditions are already worsening in Greater Manchester. The proportion of businesses classified as high risk is now 37.1% (35,000 businesses), up from 33.8% in March 2010. Simultaneously, the number of business deals has fallen over the year by a third to just 9 in February 2011. Greater Manchester Chamber of Commerce’s quarterly economic survey shows that domestic sales and orders remain low, and that employment growth in the next quarter is expected to be limited in both the service and manufacturing sectors. However, exports remain steady for all sectors and, more positively, around two-fifths of employers are still expecting to recruit.

The housing market is still weakening with Greater Manchester seeing a general fall in the average house price over the last year and consecutive falls in house prices have now been experienced in each of the last four months. The number of sales has also dipped, highlighting a continued reluctance to purchase houses at the current market price and indicating a loss of confidence as individuals become concerned about future employment prospects. However, Greater Manchester’s housing market performed more strongly over the month than both national and regional averages.

The apparent worsening of the business environment has yet to feed through into the labour market however, which performed reasonably strongly this month. There has been a significant annual fall in jobseeker’s allowance claimants of 9.3% – greater than the 7.7% decrease experienced nationally. However, despite increasing by 6.1% since January, the number of vacancies reported by employers to Jobcentre Plus has fallen by 10.9% compared with February 2010. Again, this suggests a business sector that may be starting to stutter.

There are still some positive signs for business in Manchester, though. Construction orders rose by 1.3% on the year, outperforming the North West and national levels by a considerable margin. Consumer confidence in the city centre also appears high – figures provided by CityCo suggest a continued increase in retail turnover and a continued increase in footfall into key areas of the city centre. This is further confirmed by Marketing Manchester’s hotel occupancy figures, which have shown an increase on the year.

Taken together, this month’s indicators suggest that Greater Manchester’s economy is still in reasonable health. However with the unprecedented level of global turbulence, weak business indicators, and public sector spending cuts starting in earnest this month, it seems likely that this is the calm before the storm.

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

---

DISCLAIMER

---

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.