Manchester set to outpace 2025-28 UK average economic growth rate, says report

A new economic forecasts claims Manchester will outpace the UK’s economic growth rate between 2025 and 2028.

Business adviser EY’s latest Regional Economic Forecast claims that, when measured by gross value added (GVA), Manchester’s economy is expected to see average annual growth of 2.1% in the three year period, faster than the national growth rate of 1.6%. The only other major town or city outside London expected to see faster growth over the same period is Reading (2.2%).

However, the picture is varied across the region, with the North West as a whole projected to see slower annual average growth of 1.5% between 2025 and 2028, marginally slower than the national growth rate.

The region’s average annual employment growth (0.6%) is also expected to be slightly slower than the national rate (0.7%) over this period.

Manchester is expected to record the joint-fastest rate of employment growth of all UK towns and cities from 2025 to 2028, with job numbers in the city forecast to grow at an average annual rate of 1.3% over the period.

By 2028, Manchester’s local economy is expected to be more than £2.9bn larger than in 2024 when measured by GVA, driven, in part, by the city’s buoyant tech sector and growth in professional services.

Elsewhere in the North West, Liverpool is expected to see the UK’s joint-eighth-fastest economic growth between 2025 and 2028, with an annual average of 1.5% – marginally slower than the national rate but in line with the regional average.

Meanwhile, Liverpool is forecast to see the UK’s joint-fifth-fastest employment growth over this period, with an annual average of 0.7%, equal to the national rate and outpacing the average across the North West.

At the combined authority level, Greater Manchester is forecast to achieve GVA growth averaging 1.7% over the 2025 to 2028 period. Meanwhile, the Liverpool combined authority area is expected to record average annual GVA growth of 1.3%.

Hilary Heap, EY’s north market leader, said: “The North West is home to a vibrant and diverse range of businesses, which are forecast to support growth for the region over the coming years, as knowledge-based sectors play a crucial role in fuelling economic momentum around the UK.

“Thanks to its prowess as a hub for tech and professional services, Manchester is particularly well positioned to capitalise on this, with the city projected to be one of the UK’s leading centres for growth over the next three years.

“Manchester’s continued success reflects its strategic focus on building skills and capabilities in high value sectors, and creating an attractive destination for investment.”

She added: “While the broader North West region is anticipated to see steady growth, it may lag slightly behind the national average in the coming years. This narrative is one of untapped potential, so ensuring that the right talent and investment can access more of the region’s towns and cities beyond Manchester through improved connectivity and skills development will be essential for accelerating their growth.

“It is important to consider how to leverage the North West’s traditional manufacturing strengths.

“Although the manufacturing sector may face a decline in overall job numbers, it will continue to be a vital economic contributor to the region.”

She said: “As the shift towards advanced manufacturing progresses, collaboration between the public and private sectors will be crucial in enabling the North West to capitalise on its rich manufacturing heritage while also embracing the opportunities presented by new and emerging industries.”

The report revealed that the tech sector continues to be an asset to the North West, with information and communication – which involves technology-led activity – expected to be the North West’s fastest growing sector from 2025 to 2028, with annual average GVA growth of 2.4%.

The region’s manufacturing, real estate, and wholesale and retail trade sectors are expected to remain the leading contributors to GVA in the North West between now and 2028.

However, manufacturing employment figures in the region are expected to decline by an average annual rate of 1.6% over the next three years as the sector contends with elevated energy and labour costs.

The professional, scientific and technical sector – which includes R&D as well as business-to-business services – is expected to see the fastest average annual employment growth (1.5%) in the North West over the next three years, closely followed by the administrative and support services, construction and other services sectors (all 1.4%).

Manchester’s knowledge-intensive industries are expected to be among the city’s fastest-growing sectors, with information and communication, and professional, scientific and technical activities projected to record 2.6% and 2.8% average annual GVA growth, respectively.

By 2028, these sectors are forecast to make up nearly a quarter (24%) of Manchester’s overall economy when measured in GVA.

The economic outlook is also bright in Chorley, with forecasted average annual GVA growth of 1.7% between 2025 and 2028, outpacing both the national and regional rates.

Chorley’s employment growth is expected to be in line with the national average and slightly faster than the North West rate, with 0.7% annual average growth forecast.

Warrington’s annual average economic growth between 2025 and 2028 (1.6%) is expected to keep pace with the national rate, while slightly outpacing the North West average.

Similarly, the town’s annual average employment growth (0.7%) is expected to outpace the regional rate, while in line with the forecast national average.

Rochdale Town Hall

Meanwhile, Lancaster and Rochdale are both forecast to see their annual GVA growth (1.5%) trail slightly behind the UK average between 2025 and 2028, while matching the North West rate.

Both of these locations are also set to see an average of 0.6% annual employment growth over the next three years, matching the regional rate, while marginally behind the national average.

Blackpool, Preston and Blackburn are all expected to see slightly slower GVA growth from 2025 to 2028, with an annual average of 1.3%.

Blackpool is forecast to see average annual employment growth of 0.5% over the period, with Preston (0.4%) and Blackburn (0.3%) expected to see a slightly more subdued rise.

Wigan and Cumberland are expected to see the North West’s slowest GVA growth, with an annual average of 1.2% each over the period.

Wigan is forecast to see 0.5% annual employment growth, marginally slower than the regional average, while Cumberland’s annual increase in jobs figures is projected to be the most subdued in the region, with 0.1% growth.