Chamber predicts stronger than expected growth for Greater Manchester

Greater Manchester Chamber of Commerce’s Chief Economist, Dr John Ashcroft

Greater Manchester Chamber of Commerce has released its quarter three survey having polled well over 500 businesses across the city region.

The Quarterly Economic Survey (QES) predicts a better than expected forecast for GDP growth in the year as a whole, to 1.5% rising (from a previously estimated figure of 1.2%) with projected growth of around 2.5% for 2014.

Greater Manchester Chamber of Commerce's Chief Economist, Dr John Ashcroft, remarked: “The Chamber's QES for Q3 suggests the outlook for the UK economy is pretty positive with growth in output and jobs towards the end of the year and into 2014. Inflation is not expected to be a great concern and we think the government borrowing figures will look much better towards the end of the financial year. Recruitment will be a challenge in the skilled labour market and the pay round could become more problematic for businesses by April next year."

On interest rates, he said: “The outlook for monetary policy is very accommodating, with forward guidance suggesting the Monetary Policy Committee will be reluctant to increase rates until the recovery is well proven. This will underpin investment plans which will be brought back to the board table as the order books improve. Overall the prospects for growth into the second half of the year and into next look good. If there is one concern, it is that they may look too good. The UK is on track for faster growth than the major trading partners of USA and Europe.”

Although too rapid growth will create problems with the trade deficit: “If this were to happen, the impact on the trade deficit would be significant. The incumbent risk of capital flight and base rate pressures would force the hand of the Monetary Policy Committee to put rates up ahead of schedule.”

The results follow encouraging initial signs from the last QES report. For more information and previous QES reports, visit http://www.gmchamber.co.uk/qes