Outlook remains challenging, Chamber survey shows

THE outlook remains challenging for Manchester businesses, as domestic demand remains weak, according to the Chamber’s latest Quarterly Economic Survey.

Overall this quarter’s survey from the Greater Manchester Chamber of Commerce indicates that local businesses have seen some positive results, despite weak domestic demand and a slowing global economy.

The survey shows declining service sector export demand is a concern and the situation could deteriorate in the months ahead. But job creation, confidence and investment have all shown resilience.

The service sector continued to see positive domestic demand for both sales and orders, though as with the second quarter, the financial and professional services businesses located predominantly in Manchester city centre are driving this performance.

Manufacturing saw an improvement on second quarter performance, driven mainly by better construction sector sales, though orders remain very negative looking ahead, the report said.

However, it notes that construction sector sales and orders in Q2 were particularly poor, being the weakest for over ten years.

Dr Brian Sloan, chief economist at Greater Manchester Chamber of Commerce, said: “Greater Manchester’s economy has performed better than we expected given the difficulties it faces.

“Looking ahead there remain significant challenges for businesses. Without stimulus at a regional level we are unlikely to see significant growth and improvement in job creation for some time to come.

“There remain opportunities to build on the region’s asset and skills base if the right decisions over infrastructure investment, planning processes and easing of regulatory burdens offer favourable conditions that give businesses confidence to move to the region.

“Re-balancing the economy is not simply a question of imports versus exports and the shifting of economic activity around the country; we must recognise our position within the global economy and how we can ensure that the region continues to compete.”

Meanwhile, a report by New Economy has highlighted how Greater Manchester has a strong base of profitable, innovative and internationally competitive advanced manufacturers.

However, the report goes on to warn that the sector will not be the panacea for employment growth that many hope it will be.

The report focuses on the sector’s 38,000 employees within Greater Manchester, who account for almost a quarter of all advanced manufacturing employees in the UK. 

The findings of the report are being used to galvanise the efforts of the Greater Manchester Local Enterprise Partnership (LEP), local authorities and the broader private sector on the next steps to take in order to continue growth and to reach the full potential of this sector.    

Baron Frankal, director of strategy at New Economy, said: “This is an important report which scrutinises the pros and cons of one of Greater Manchester’s crucial economic sectors.

“It shows that whilst profit and productivity has increased across the advanced manufacturing sector, this unfortunately does not correlate with employment in the sector – which is on the decline.  The trend is reflected across the globe and is due to a number of factors such as improved technologies and precision engineering, which continue to reduce employment requirements.”