Bumpy start for Greater Manchester as UK Plc stumbles

New Economy has released the February 2013 edition of the Manchester Monitor, a monthly snapshot of the economic wellbeing of Greater Manchester (GM).

This month’s analysis considers the looming fears that a triple dip recession may hit UK Plc after GDP figures revealed the UK economy shrank by 0.3% in the final quarter of 2012, and how this affects Greater Manchester’s persistent challenges.

The conurbation’s labour market continues to struggle with just over 82,000 people claiming Job Seekers Allowance (JSA) in December 2012. This represents a monthly decline of 1,300 (1.6%) compared to November 2012, but on an annual basis the number of claimants is virtually the same as this time last year. With an average 3.3% decrease in claimants nationally in the last year, GM is taking considerably longer to recover than in other parts of the countries.

House prices have now remained stagnant for almost two years in the region; however there are also a number of positive factors to consider.

The Chamber of Commerce’s Q4 2012 Quarter Economic Survey found that the local economy largely bounced back in the last three months of the year, stimulated by summer activities. The Greater Manchester Business Survey reported similar trends with good levels of confidence across the board.

Furthermore, GM’s visitor economy continues to perform well. Passenger numbers at Manchester Airport continued their year-on-year rise in November with 1.3m passengers, up 8.7% on the same time last year. In addition, year-on-year hotel occupancy rates in Manchester city centre rose 2% to 72% in December 2012 with weekend rates peaking at 87%, the highest level for December since records began in 2003.

Baron Frankal, director of economic strategy at New Economy, said: “UK Plc hasn’t got off to a good start in 2013, with GDP figures and post-Christmas numbers waning. This is further proof we have a long way to go before the broader economy works through the long-term realignments we require, following the economic imbalances that created the financial crisis in the first place. The changes that we need to make to manage and to benefit from this new era have hardly even started.”

“Greater Manchester shares the burden of this long slog, although the latest Manchester Monitor notes some welcome distractions. Manchester Airport’s takeover of Stansted for example, makes the group one of the UK’s biggest companies, which, like other major businesses that have their headquarters or significant branches here such as Co-op and the BBC, offers broader economic effects. It should help in particular to bring some new routes to Manchester, including from China.

“The High Speed Rail announcement was similarly good news for everyone; it will cut two and a half hours off the round-trip from Bolton to London for example, open up new business opportunities and make the whole conurbation much more attractive to investors and upwardly-mobile residents alike.”