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A strong professional services sector and a world-class university will mean Manchester will be home to one of the fastest job growth rates in the UK by the end of 2022, according to the latest activity report from the UK. national law firm Irwin Mitchell.
The UK Powerhouse study, which was produced by the Center for Economics & Business Research (Cebr), analyzes 50 of the largest local economies in terms of employment and GVA growth.
In the latest report, while Manchester is expected to take eighth place next year in the labor force rankings, that means it will drop from seventh place in the 2021 rankings.
Manchester’s post in 2022 is due to a 2.2% year-on-year growth equivalent to 11,100 newly filled posts.
Despite a strong performance from Manchester and other major cities such as Leeds, Birmingham, Cardiff and Edinburgh, smaller towns in the north including Stockport and Preston are in the bottom 10 of the 50 towns.
The report says that the relatively strong performance of the city of Manchester is aided by the composition of its labor market which makes it relatively resilient to disruptions caused by public health measures.
Retail represents a lower share of employment than in other UK cities, at 11.9% in 2019 and although Manchester’s labor market employs an above-average share of workers from hospitality, the report says they represent only a small part of the city as a whole. workforce, which is characterized by professional services.
Another important factor for the local economy is the University of Manchester, he adds, as it has established itself as one of the country’s leading higher education institutions.
Although Manchester is expected to have a relatively strong 2022, there are signs that the North-South divide is widening.
Hot spots such as Oxford, Cambridge and Milton Keynes are expected to see annual GVA growth of 3.3% by the end of 2022. This will translate into a total of £ 1.8bn added to their combined economic production.
This economic growth represents the same increase in production seen in Manchester, Leeds, Sheffield, York and Liverpool combined.
Hannah Clipston, Partner at Irwin Mitchell, said: “The UK economy has undergone significant changes over the past two years and this report underlines that the recovery is unlikely to be linear or even uniform.
“Over the next 12 months, our report forecasts that manufacturing output will increase by 3.5% while that of hotels will increase by 35%. This has a huge impact on the variations we see in terms of growth in different places and should be taken into account by the government as it seeks to level and address the North-South divide. “
Irwin Mitchell’s report also examines the extent to which disruptions in the economy lead to innovation. Here, the study reveals that the North West region came eighth behind regions such as the South East, South West and Yorkshire.
Hannah added, “Businesses have been incredibly resilient over the past two years and have faced many disruptors including COVID, labor shortages, supply chain issues and high costs. fuel.
“Our latest study recommends that no matter what industry they find themselves in, organizations should adopt technology faster and adapt to the UK’s new post-Brexit status.
“All of this will require a change in approach and for innovation to be celebrated and encouraged more than it is now. It is vital that businesses are encouraged to follow this path and receive the right level of support to help them succeed.
Other cities in the Northwest fare differently when it comes to GVA growth.
In the 2021 rankings, Preston is in fourth place in the UK, with GVA growth of £ 4.2bn, equivalent to 8.5%, Liverpool is 12th at £ 12.6bn , up 7.5%, while Warrington is 13th, out of £ 7.2. billion, also 7.5%.
However, forecasts for 2022 show Preston and Liverpool moved out of the top spots, while Warrington moved up to ninth, with a GVA level of £ 7.4bn, representing growth of just 3%. .