Greater Manchester economy remains resilient, finds Chamber survey

Greater Manchester’s economy continues to see a low level of growth but has avoided recession and remains resilient, according to the figures from Greater Manchester Chamber of Commerce’s latest Quarterly Economic Survey (QES).

Subrahmaniam Krishnan-Harihara, Director of Business Policy and Research at the Chamber, gave an overview of the QES results and explained what they meant for the local economy. He said:

“The key issue is that we’ve had a long period of low-level economic growth. We’re not heading towards a recession, but we do have a consistently low level of economic growth. The services-driven decline we’re seeing signals softer consumer spending but there’s been no collapse in manufacturing and construction activity is still resilient.”

The Greater Manchester Index, which is a composite figure based on data taken from the Quarterly Economic Survey, now stands at 13 (down from 15 last quarter). Subrahmaniam added:

“The Greater Manchester Index has weakened since the last quarter. There’s no crash but it has certainly weakened compared with the last figure. The Index has been consistently hovering around the 13 to 15 mark.”

He highlighted how the following factors had contributed to the dip in the Greater Manchester Index:

• Drop in domestic demand
• Dip in advance orders
• Services have gone down
• The construction sector has seen two consecutive quarters of contraction
• Overseas demand has gone down for services with service exports crashing but manufacturing exports increasing

However, he pointed out that manufacturing had done better than other sectors and showed significant growth. He said the Chamber’s Construction Pipeline Analysis showed that there was £35 billion worth of projects planned over the next five years in Greater Manchester. He added:

“Optimism in manufacturing and construction has gone up. Nationally construction is under stress but there is resilience in Greater Manchester. There is some good news about business resilience in the figures, but we need business investment to pick up as we can’t just rely on consumer spending.”

Subrahmaniam pointed out that the Retail Sales Index went up between April and May, showing that people were continuing to spend but said consumer confidence was weakening. He said:

“Many of the services sub-sectors, such as defence and health, are reliant on public sector spending but we can’t rely too much on that during times of financial stress. The key challenge for the new Prime Minister is where will all the investment funding come from?”

The results of the QES for the second quarter of this year were revealed at the Greater Manchester Business Index event held by the Chamber and the Growth Company at The Manchester College’s City Campus. The event, which was hosted by the Chair of the Chamber, Wayne Jones OBE, was attended by business leaders from across Greater Manchester.

Rupert Greenhalgh, Head of Business Intelligence at The Growth Company also explained what his own organisation’s research revealed about the Greater Manchester economy. He said:

“There’s no material impact from the Middle East conflict in the figures but longer term it will wash through. In manufacturing the big concern is future orders, and we will probably start to see more stress in that area.

“Uncertainty about hiring means that the number of job vacancies in Greater Manchester is at its lowest level in five years. We’re nowhere near a recession but there’s nothing to shout about in terms of growth.”

He warned that many SMEs did not have enough cash reserves to meet future challenges.

The event ended with a panel discussion featuring:

• Colin Brew, Head of Strategic Partnerships, GM Business Growth Hub
• Lauren Hughes, Global and Chamber Network Manager, Greater Manchester Chamber & The Growth Company
• Tania Dimitrovich, Tax Partner, Armstrong Watson

The panel answered questions about training, the opportunities and challenges facing businesses, how companies are using AI and the key issues for business leaders.