Chamber’s survey reveals slack summer

THE economy of Greater Manchester  “stalled” during the summer months, a survey of more than 820 companies suggests.

The results of the Chamber of Commerce’s Quarterly Economic Survey (QES) for the three months to September 30 were described as “disappointing but unsurprising”.
 
The QES suggests that recent employment gains have tailed-off and the city region’s service sector has seen a fall in domestic demand, erasing the gains made in the second quarter of this year.

The Chamber said the service sector had a particularly difficult quarter, with the euro zone crisis, the Olympics and bad weather all impacting consumers over the summer.

The manufacturing sector, having performed well for much of the past two years, also saw a fresh fall in domestic demand –  the fourth consecutive fall,  suggesting that the sector has started to contract.

On a more positive note, the construction sector has seen a big improvement, reporting its strongest results since quarter four of 2011.

Dr Brian Sloan, chief economist at the Chamber said: “We have been warning for some time that the region remains exposed to public sector spending cuts, the weakness of consumer demand caused by the inflationary squeeze on households and has been dependent on export demand to grind out growth.

“In the current slow growth environment it is somewhat inevitable that from time to time there will be setbacks. Although there were encouraging signs in the Q2 results, providing some cause for optimism, there were also signs of weakness.

“These signs have turned to reality. The summer has been mixed, with many businesses reporting that things have been ticking along. The reality is that economic activity has been somewhat slow.”

Despite the downbeat local picture, the Chamber expect that the GDP figures due out on Thursday will show a return to growth in Q3.

The QES found that access to finance continues to be a challenge for businesses and that there is a lack of competition among UK banks. The survey also suggests that the trend in retail sales moving from in store to online will continue, leading to major changes to local high streets.