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October 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.
OCTOBER 2011
Labour and housing markets struggle, but visitor economy remains strong
With the exception of the gold industry, it is safe this month to say that virtually all other parts of the global economy have seen better times. Traditionally viewed as an economic safe haven, the price of gold reached record highs in September as investors sought refuge in the precious metals market. However, the picture elsewhere is not so bright and the markets are waiting anxiously to see whether a solution can be found to the eurozone debt crisis.
Against this background, the UK economy remains in an extremely fragile state and the International Monetary Fund said in September that it expects the economy to expand by just 1.1% in 2011, lower than the figure of 1.5% it had predicted in June. Adding to this, inflation has risen to 4.5% as a result of higher prices for clothing and footwear, petrol and energy. In addition, construction activity declined in the first half of the year, manufacturers reported falling order books for September and unemployment continues to rise. With the very real threat of a double dip recession now looming, the Bank of England has opened the door for another round of quantitative easing worth £50 billion and some analysts believe that this could restart in November.
Greater Manchester is by no means immune to the economic uncertainty, and in particular to the impacts that this is having on the labour market. The number of people claiming Jobseekers Allowance (JSA) in GM grew by more than 6,000 in the 12 months to August 2011, while long-term and youth JSA claimant numbers are continuing to rise on a monthly basis.
The housing market is still subdued, with people unable to find the high deposits required to purchase properties and sales are currently at their lowest level nationally for two years. This issue is being exacerbated by the fact that rental levels houses in GM have increased year-on-year as a result of increased demand and a lack of properties on the market. A typical 3 bed apartment now costs just under £990 per month to rent, a rise over the last 12 months of 3.2%. An average 4 bed house in GM is £1,100 per month, an annual rise of 6.2%.
The two areas where GM continues to perform well are hotel occupancy and airport passenger numbers, both of which help to support the view that even in these difficult times, GM’s international standing and external profile remains strong. Passenger numbers at Manchester Airport reached 2.1 million in July 2011, 5.6% (+112,000) higher than in July 2010. And whilst hotel occupancy fell back from the record levels achieved in June and July, year-on-year change remains positive.
The economic climate is clearly extremely challenging and employment forecasts produced by Oxford Economics as part of the GM Forecasting Model suggest this situation is unlikely to change in the near future. In particular, growth in jobs from 2010-2015 in GM is now forecast to be just over 50,000, less than the figure of 75,000 for the same period in last year’s model.
You can find more detailed analysis and the data throughout the Manchester Monitor for October 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.
