Manchester economy outperforms Northern neighbours but falls behind Southern cities
Manchester’s economy grew faster than any other in the North of England in the second quarter of 2019, but it continued to be outperformed by cities in the South and East of England, according to a new report.
According to the UK Powerhouse report by Irwin Mitchell and the Centre for Economic & Business Research (Cebr), Manchester’s economy saw year-on-year GVA1 growth of 1.3% in the second quarter of 2019, placing it in 17th place in the league table.
The report attributes much of Manchester’s growth to its ability to draw a high number of skilled people into the city.
It says Manchester is the second most popular destination in the UK for recent graduates, adding that between 2009 and 2017, the city gained 19,050 21-year-olds.
UK Powerhouse says the city continues to be a centre of innovation in the UK, with 90 business start-ups per 10,000 people – the highest rate in the country after London.
However, compared with the capital city, Manchester is a much more affordable place to live and run a business, with the average house price standing at around one third of the cost of houses in London.
In the North of England, Liverpool performed best for employment growth on the second quarter Powerhouse table, recording a 1.5% increase.
A key source of employment growth in Liverpool is advanced manufacturing, with the sector contributing £3.2bn to the economy.
Within the sector, advanced manufacturing is being targeted as a key source of growth, and the Manufacturing Action Plan has been developed to ensure a cohesive approach to growing the industry in the city.
The report includes a ‘Brexit Disruption Index’ and this, however, highlights major challenges ahead for the manufacturing sector.
The report assessed which industrial sectors will be affected most after the UK leaves the EU with a deal by identifying changes to three key indicators – the free movement of labour, tariffs on exports to the EU, and investment into the UK from the EU.
According to the study the manufacturing industry will face more disruption as a result of Brexit than any other sector.
Manufacturing has an index score of 90% and the report says that, even if a deal is secured, the sector will contract by 0.8% in 2020, down from a fall of 0.5% this year.
Roy Beckett, a partner at the Manchester office of Irwin Mitchell, said: “Our economy faces many challenges and although Manchester has performed reasonably well in terms of output in the second quarter, it is still some way behind many of the cities in the South and East of England.
“It has a lot going for it in terms of its strong skills base, boosted by its attractiveness as a place to live, but the report’s ‘Brexit Disruption Index’ highlights the difficulties that could lie ahead.”
