Short term weaknesses overshadow long term optimism for growth

The December 2012 edition of the Manchester Monitor – a monthly analysis of the latest trends in the sub-regional economy – suggests that whilst Greater Manchester is clearly on the road to recovery, the region is still behind the curve in significant areas such as unemployment.

The latest Jobseeker’s Allowance (JSA) figures show that 84,500 people in GM were claiming JSA in October 2012 and whilst a slight decrease on the September 2012 figure, on an annual basis the overall number of JSA claimants remain 2,200 (2.7%) higher than this time last year.

The recently published Greater Manchester Forecasting Model (GMFM) anticipates that the peak levels of employment achieved in 2007 are not forecast to return until 2017 in GM. From 2012-22 an estimated 85,000 new jobs are forecast to be created in GM, with the business services sector anticipated to be the main contributor of new employment opportunities.

This month’s Monitor also highlights that there is no sign of any real recovery in housing market as continuing low levels of sales keep values depressed.

Other indicators this month give rise to cautious optimism. Hotel occupancy data for October, though slightly lower than 2011 rates, were higher than in the preceding two years. Meanwhile there has been further year-on-year growth at Manchester airport with 15.5 million passengers using the airport over the period January-September 2012 – 600,000 more than in 2011.

The most significant good news story this month is that from March 2013 Manchester will become the only airport in Britain outside of London offering direct flights to Moscow when easyJet launches a four times a week service to the Russian capital.

Baron Frankal, director of economic strategy at New Economy, said: “Whilst there is some good news this month, with a continued increase in airport passenger figures and some optimistic long-term messages from the GMFM, overall we end 2012 as we started - with the need to focus on the economy long-term and build for a future that brings better and more sustainable jobs. At the same time, now, we need other interventions, on schools and skills, transport, health and housing that enable all across this great city to access those jobs. The only silver bullets are patience, perseverance, luck and having enough intelligible information to make the right choices.

“In the short-term, the recent announcement about easyJet’s Moscow service is great news and will help boost both business and leisure-related tourism between Manchester and Russia, and vice versa. The route is expected to attract up to 60,000 passengers in its first 12 months and easyJet will base an extra aircraft at the airport, creating 80 much needed jobs and further cementing the airlines commitment to Manchester.

“Looking further ahead, the new GMFM figures are a timely release, and allow us to take stock of where the economy currently stands and where it will go in the future. While the forecast of 85,000 new jobs in Greater Manchester between 2012 and 2022 is below the increase seen during the decade prior to the recession, it still serves to emphasise that even in a difficult economic climate, the long-term future of GM looks bright.”