‘Greater Manchester’s economy has slowed but remains strong’, report says

Greater Manchester’s economy slowed in the third quarter of 2015 but remains strong, a report released today reveals.

Manufacturing companies noting weaker order books contributed to the “slight slowdown” in July, August and September.

But the experts behind the Greater Manchester Chamber of Commerce’s Quarterly Economic Survey (QES) believe the services sector is doing well and construction is enjoying a strong growth spurt.

Christian Spence, head of policy and research at the Greater Manchester Chamber of Commerce, said: “Despite the Manchester index slowing slightly to 31.3 (from 32.4 last quarter), the index continues to indicate that the Greater Manchester economy is growing at levels above those seen before the 2008 recession.

“The UK Chambers of Commerce recently revised their economic forecast for 2015 up to 2.6% and to 2.7% for the next two years.

“We expect the result for 2015 to be slightly higher, driven mainly by strong construction activity in our region which we believe is under-reported in official data from the Office for National Statistics.”

Further QES findings show that Greater Manchester exporters are reporting continued growth in line with long-term trends.

Hiring levels also remain high and job growth is robust, according to the experts behind the report.

They revealed that strong data from the construction sector is pushing up overall manufacturing data, but while core manufacturing and service industries have seen the job growth rate slow slightly, the level is favorable compared to that observed before the recession.

According to the QES, around six out of 10 companies are currently trying to recruit – representing 80% of construction companies – which is putting some pressure on the labor market as a whole.

Economy of Greater Manchester

Experts said wages were starting to rise sharply and more than 75% of companies reported difficulty finding the right person.

Despite the slowdown in the Manchester Headline Index caused by a slight moderation in demand, confidence remains elevated.

Experts said revenue and profitability forecasts for the year ahead are near record highs, with only core manufacturing seeing a drop of more than a few points for revenue estimates.

And while the report said investment in the city area provided a mixed picture, it said the outlook for inflationk remained weak.

In conclusion, the bosses said Greater Manchester’s economy appeared “sound, both on its own and relative to the UK as a whole”.

Mr Spence added: “Overall the data again shows a positive picture for the Greater Manchester economy. All sectors are showing growth, although basic manufacturing looks markedly weaker than the same time last year and is expected to dampen broader growth for the rest of this year.

“The dominant service sector is doing well and construction is experiencing a strong growth spurt which can be limited by access to capital, skills and materials.”

He added: “The continued decline in unemployment is putting increased pressure on the labor market as a whole and is now reflected in growing wage settlements and driving strong investment in skills and training.

“Investment levels are strong, showing medium-term future growth expectations and with such positive cash flow, much of this investment will be self-funded.”

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