Recession over, but challenges ahead for Manchester

THE economy may have moved out of recession but Greater Manchester faces challenges in the labour, manufacturing and housing markets, according to research body New Economy.

Its monthly Manchester Monitor shows the number of people claiming Job Seekers’ Allowance was up 3% in September on last year, against a decline regionally and nationally.

And the Chamber of Commerce’s Quarterly Economic Survey (QES) suggested that Greater Manchester’s economy stalled in the three months to September.

In the manufacturing sector companies reported negative growth in UK sales of -2%, but export sales and orders remained positive.

New Economy said the housing market in Greater Manchester is still challenging with the average house price static at £104,257 while sales are stagnant.

However, other indicators are more positive – the visitor economy in particular remained strong with Manchester Airport enjoying further year-on-year increases in passenger numbers, up to 2.21 million in August 2012 compared to 2.18 million a year ago.

Furthermore, hotel occupancy rates in Manchester city centre were recorded at 81.7% in September 2012, up 2% on an annual basis and the best September occupancy rate for the city centre since September 2006 despite growth in the number of hotel rooms in that period.

Baron Frankal, director of economic strategy at New Economy, said: “The recent announcement that the UK has finally emerged from the double-dip recession is a cause for measured optimism. The economy remains fragile and there are likely to be many ups and downs in the coming years before a firm growth trajectory is established.

“Greater Manchester’s increase in unemployment is also extremely concerning. Efforts to boost productivity will need to be doubled over the medium-term in order to generate sustainable jobs growth.  In the short-term, work that we’re undertaking on apprenticeships and skills is critical to enable our residents to take up opportunities that are emerging in the growing knowledge economy.

“Not unconnected, Lord Heseltine published a major report last week, which adds weight to the argument that places like Manchester are stunted in their ability to create jobs because the UK is too centralised in terms of its power and funding.  With many of the things that we would like to do in Greater Manchester being decided in Whitehall rather than say, Wigan, Heseltine has dedicated himself to ‘reversing a century of centralisation’.

He added: “The sort of devolution that Lord Heseltine is talking about would help us to build better upon the strengths that Greater Manchester has, like our visitor economy, which keeps our external profile strong. With so many big events taking place in Manchester over the winter months, this should continue to have a positive impact on the economy in terms of boosting visitor numbers and trade.”