Manchester’s economy to be UK’s third fastest growing between 2024 and 2026

Stephen Church

A new report claims that Manchester will see the third-fastest economic growth of all UK towns and cities between 2024 and 2026.

When measured by Gross Value Added (GVA), Manchester’s economy is expected to see annual average growth of 2.5% between 2024 and 2026, comfortably outpacing the national growth rate (2.1%). Only Reading (2.7%) and London (2.6%) are expected to see faster growth than Manchester, says EY’s latest regional economic forecast.

The North West is expected to see annual average growth of two per cent over the same period – a bounce back from the 0.7% contraction forecast for 2023.

Manchester is also expected to record the fastest rate of employment growth of any UK town or city from 2024 to 2026, with job numbers in the city forecast to grow 1.8% per year over the period. Meanwhile, UK jobs are expected to grow an average of 1.3% a year, and North West jobs are expected to be up 1.2% each year.

Elsewhere in the North West, Liverpool’s economy is forecast to see 1.9% annual average growth from 2024 to 2026 – marginally below the national and regional averages. Positively, the city is forecast to see job numbers average 1.3% growth per year between 2024 and 2026, in line with the national rate and slightly outpacing the North West average.

The North West is expected to have the fastest-growing economy in the North of England between 2024 and 2026, with the administrative and support services, and information and communication sectors set to play a key role for the region’s growth.

Manchester’s positive outlook is supported by expectations for the professional, scientific and technical, and financial and insurance activities sectors. By 2026, GVA in Manchester’s local economy is expected to be £2bn larger than in 2022.

Stephen Church, EY’s North market leader, said: “The North is home to many of the UK’s most dynamic and innovative businesses and, while the next 12 months will be economically challenging, there are areas across the region where we can expect to see encouraging growth over the next few years. The North’s cities are set to be particularly strong performers.

“However, progress is about the whole of our region, not just our bigger cities. And while several towns and cities are expected to see better economic and employment growth than many other parts of the country, too many places are still expected to trail behind.”

He added: “In order to spread growth, not just throughout the country, but throughout regions too, it is critical that the public and private sectors work together to combine their expertise, strengths, and capabilities. The North needs both working in tandem to succeed.

“Looking ahead, the regions across the North need their own clear strategies for growth, which reflect each region’s own strengths and unique attributes.

“Getting the right sector mix is key, and investment in high value sectors and skills can help build a sustainable future – not just for the North, but for the whole country, too.”

Outside of Manchester and Liverpool, Chorley has reasons for optimism, with forecast average GVA growth of 2.4% per year between 2024 and 2026 – significantly outpacing the national average. Chorley is also expected to see higher employment growth than the national rate for the same period, with 1.4% annual average growth forecast.

Chorley’s prospects are expected to be particularly boosted by the town’s real estate activities and construction sector.

Warrington, Rochdale and Lancaster are all expected to see their economic growth only marginally outpaced by the regional and national rates, with an average of 1.9% growth per year forecast for each from 2024 to 2026.

Warrington and Lancaster’s average annual employment growth rates are expected to keep pace with the regional average over the same period at 1.2%, while Rochdale’s is expected to be slightly slower (1.1%).

Carlisle, Blackpool, Wigan and Preston are among the towns expected to experience the most significant economic challenges in the North West, with average economic growth of just 1.5% each per year forecast from 2024 to 2026 – trailing both the national and regional averages.

Carlisle is also expected to have the joint slowest employment growth in the North West from 2024 to 2026, along with Blackburn, with both forecast to see jobs rise by an average of 0.8% per year over the same period. Blackburn is expected to record average annual GVA growth for 2024-2026 of 1.7%.

The EY report also says that the rising cost of living and weaker consumer spending are expected to deepen the economic divide between London and the rest of the UK.

The forecast says that UK Gross Value Added (GVA) is expected to decline 0.6% over the course of 2023, with London (-0.2%) the only part of the country predicted to see a smaller economic contraction than the UK overall. While Scotland is expected to match the overall UK GVA performance in 2023 – also contracting 0.6% – other parts of the UK are forecast to lag behind. Yorkshire and the Humber and the East Midlands are predicted to see the steepest GVA contractions, at one per cent each.

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