Chamber quarterly tracker shows steady economic performance

The latest data from the Greater Manchester Chamber of Commerce Quarterly Economic Survey shows a steady performance for Greater Manchester businesses in the third quarter of 2017, with manufacturing seeing its highest domestic demand and strongest overseas orders position for over three years.

This data has led to the Chamber’s Manchester Index rising in Q3 2017 to 30.3 from 27.3 in the previous quarter – the highest level in two years.

However, the underlying data shows that this growth is more unbalanced than in previous data, with almost all expansion coming from companies with 100 or more employees.

Christian Spence, head of research & policy at Greater Manchester Chamber, said: “The update to the Manchester Index suggests growth in Greater Manchester in this quarter of around 4% per year, though with rates of growth of the service sector slowing, our key judgement remains that risks are weighted to the downside for the coming quarters and the outturn for the year as whole in Greater Manchester will now likely be closer to three per cent.

“The latest data from the Chamber’s Quarterly Economic Survey and the Manchester Index leads us to leave our forecast for UK growth in 2017 unchanged at 1.6% but to downgrade our expectations for 2018 from 1.5% to 1.2%. At a Greater Manchester level, our forecast for growth here is revised down slightly from 3.25% to 3%-3.25% for 2017.”

The survey shows:

• manufacturing businesses experiencing increased growth rates in the domestic market, whilst construction and services show a moderate softening compared with the previous quarter.

• Employment intentions remain high and have strengthened further over the past quarter, though recruitment difficulties remain elevated for all sectors.

• UK export volumes have seen increases over the past five quarters as the depreciation of Sterling allows UK firms to adjust prices and/or take additional profits.

Speaking of UK exports, Spence said: “We continue to urge caution in the overly positive effects that many commentators expect to see from the currency-driven boost to exports.

“There is no evidence in the historic data of the UK’s many devaluations that these have, or will, provide a net positive impact either to net UK trade or to the aggregate position of the UK economy. The UK has long run a trade deficit and, more recently, a large current account deficit, meaning that the negative impacts of a weak currency will outweigh the positives overall.”