Greater Manchester’s economy continues to perform better than the national average despite ongoing uncertainty over Brexit and possible early signs of a global reaction to US led increased trade tariffs.
The latest Greater Manchester Chamber Quarterly Economic Survey (QES), representing the views of over 350 Chamber members who employ over 48,000 people, shows an overall upturn in the three main sectors of manufacturing, services and construction.
The Chamber’s Manchester Index – using seven indicators from the QES, including domestic sales and orders, international orders and confidence in turnover - rose sharply in the last quarter by just under 3 whole points to 31 – a level it hasn’t reached since 2015. The Index is the best indicator of the overall performance of the Greater Manchester economy and has strong correlation to national GDP measures. The QES forms a major part of the UK’s largest and most reliable business survey, which is used by the Bank of England and the Treasury.
Looking at domestic sales and orders, Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber, said: “There has been an upturn in the second quarter in all three sectors. The good weather and the Royal Wedding have both contributed to this, particularly in the hospitality and retail sector, but there are other factors.
“Nationally, construction has slowed down as the sector was hit by the collapse of Carillion, but it doesn’t feel like that in Manchester with the number of cranes in the city centre.
“The UK economy is expected to do well in the short-term and Greater Manchester continues to do better than the national economy.”
He added: “Despite Brexit and new US tariffs confidence is quite high for services and construction, but not so high for manufacturing. The survey showed that 60% of construction companies are near capacity to expand. This suggests there are problems with recruitment and a risk of wage inflation.”
With international demand, the QES reveals that manufacturing and services remain steady in terms of exports, whilst construction reports a significant fall in international sales and orders.
Alex Davies, Research Analyst at the Chamber, said: “The export boom caused by the depreciation of the pound seems to be over and imports are increasing. Construction businesses seem to be focusing on the domestic market with a number of large projects across the North West, but may also be restructuring in ways that mean some international activity is no longer counted in export numbers. Despite this, the sector is expected to expand over the next few years.”
The survey found unemployment has continued to fall as the economy continues to create new jobs.
Alex added: “Economists have been saying the economy is at full employment for some time, but unemployment continues to fall, although some of these new jobs are being created in the ‘gig economy’ and may be less secure. Across Greater Manchester the QES shows that the number of businesses trying to recruit is growing, but so are the difficulties in finding the right people.”
Picture courtesy of Antoine Agricole