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July 2011
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.
JULY 2011
Blue skies remain on the horizon as the economic storm continues
The difficulties faced by the UK economy continue, with the minutes from the Bank of England’s June monetary policy committee meeting revealing a sharp division on the monetary response to the fiscal contractions between interest rate rises and a further round of quantitative easing. There are ever increasing signs that the UK’s weak economic performance will continue for longer than expected.
The Bank of England governor, Mervyn King, sounded a further note of caution in June when he warned that people are likely to keep their hands in their pockets over the next 12 months as high inflation increases the cost of living. His comments came after the latest figures show that households suffered a 0.8% drop in real disposable incomes during the first three months of 2011, with any pay rises being offset by the rising costs of fuel, basic goods and VAT.
As a result of the financial squeeze, people are reigning in their spending and household expenditure fell 0.6% in Q1 2011 to leave it 0.3% lower than the first quarter of 2010. The recent woes faced by the retail sector with companies such as TJ Hughes, Jane Norman and Habitat sliding into administration certainly add weight to the argument that expenditure is continuing to fall as we move into the second half of 2011.
In Greater Manchester, the tough economic conditions are clearly evident. The number of people claiming Jobseeker’s Allowance (JSA) effectively remained stagnant between April and May at just over 76,500. However, the number of people claiming JSA for 6 months or longer has been rising since the end of 2010 and reached 26,400 in May: an increase of 1,400 on the April figure. With a large monthly reduction in vacancy numbers, these are challenging times for people trying to re-enter the labour market.
On a brighter note, newly released figures by the Office for National Statistics show that Greater Manchester’s population increased to 2.63 million in 2010 – an annual rise of more than 28,000. Significantly, the estimates show that Greater Manchester accounted for three quarters of the total growth experienced across the North West.
At the Digital World Media Centre, which is adjacent to MediaCityUK, there have been a series of high profile lettings, including the Daily Telegraph, whilst the high profile launch of the Sharp Project in New East Manchester further broadens the conurbation’s offer in this growth sector. The Chamber’s Quarterly Economic Survey also points towards increased optimism amongst businesses. Passenger growth at Manchester Airport has been strong and fuelled by the extended holiday period in April, passenger numbers rose to more than 1.4 million and indications for May are that they will be in the region of 1.7 million.
Nationally, the UK economy remains in a fragile state with high inflation and little sign of a rise in interest rates. Greater Manchester therefore needs to ride out the current economic storm. If it can do this and build on assets such as MediaCityUK, the Sharp Project and Manchester Airport, the signs for a potential recovery are good.
You can find more detailed analysis and the data throughout the Manchester Monitor for July 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.
