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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SEPTEMBER 2011

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Challenging times for GM as UK recovery slows

The gloom continues to intensify for the UK economy. Manufacturing activity contracted for a second successive month in August, while the latest unemployment figures for April to June show that the number of people out of work grew to 7.9%, a rise of 32,000 on the figure over the same period in 2010.

Inflation remains high at 4.4%, while wages have risen by only 2.2% on average. The rising cost of living is placing further pressures on household spend and the chief executive of the Co-operative Group recently stated that trading conditions in its food stores were the toughest he had seen in more than 40 years.

With high inflation figures and sluggish economic growth, not only is an imminent interest rate rise now unlikely, a member of the Monetary Policy Committee suggested last month that there may be a need for a further round of quantitative easing in order to stimulate the weakening economy. All this is clearly having the knock-on effect of reducing confidence, with an Ipsos MORI poll highlighting that more than two-thirds of households now expect economic conditions to have worsened in 12 months’ time.

Greater Manchester has not been able to escape these downbeat economic trends this month. In particular, the number of people claiming JSA has grown by more than 4,750 since July 2010 to reach 79,000. Long-term and youth JSA claimant numbers also increased on a monthly basis. In addition, the housing market is effectively at a stand-off as sellers remain reluctant to cut prices and buyers are unwilling or unable to pay what they perceive to be over the odds for properties.

More positively, there are signs that GM’s international profile is growing and at the end of August it was announced that Manchester Airport is to become the sister airport of Beijing Capital International Airport, the second largest in the world. It is hoped that a direct service to China will be launched within 12-18 months. In a further sign of GM’s popularity, Manchester is now ranked in 42nd position out of 140 cities by the Economist Intelligence Unit’s Global Liveability Rankings – 11 places higher than London and has climbed four places in the last two years.

Supporting this view of a growing international profile, passenger numbers at Manchester Airport reached 1.92 million in June, above the figure of 1.84 million in June 2010. In addition, hotel occupancy remains at record levels. Occupancy in the city centre was nearly 82.0% in July, its highest July figure since recording began in 2000. For GM as a whole, occupancy was an impressive 80.0%. It remains to be seen what impact the recent riots will have on future figures.

The drive towards improving GM’s international profile bodes well, in terms of being able to attract foreign talent, increasing exports and attracting visitors. However, rising unemployment, high inflation and falling wages make growth extremely fragile. With partners working together to deliver the Enterprise Zones at Airport City and the recently announced Daresbury Science & Innovation Campus, GM must ensure that it has the buildings blocks in place to emerge from the downturn and deliver sustainable economic growth.

You can find more detailed analysis and the data throughout the Manchester Monitor for September 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.