Greater Manchester economy set to grow by 10% over the next three years

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

Greater Manchester Chamber of Commerce has released the results of its latest Quarterly Economic Survey (QES), which indicate strong growth at the end of 2014. The Chamber’s Economic Outlook has also been published and predicts strong growth for both the Greater Manchester and UK economy until 2018.

Over 70 business leaders from across Greater Manchester gathered at the Chamber’s Quarterly Economic Briefing at its new headquarters at Elliot House on Deansgate, to hear the results of the survey, which was completed by over 500 businesses, and hear the outlook for the year ahead.

Commenting on the the Manchester Index™, which is derived from the QES results and is an early indicator of trends in both the Manchester and UK economy, Dr John Ashcroft, Chief Economist at the Chamber, said: “The latest data points to a strong finish in the final quarter of 2014. The index improved to 36.7 in the fourth quarter from 32.0 in Q3, driven by export confidence returning to the manufacturing and service sectors following the setback in the third quarter.

“The outlook for home orders and deliveries improved in both the service sector and the manufacturing sector. The export outlook also improved significantly with an increase in manufacturing orders and deliveries for international markets.

“Businesses seem confident about prospects for turnover and profits, and are unconcerned about the risk of interest rate rises or exchange rates movements. The ever present challenge of competition however remains intense.”

According to the QES data, employment strength also moved to a new high in the quarter, with employment expectations improving significantly in manufacturing.

The Chamber’s economic outlook for 2015 predicts growth of 2.9% for the UK, slowing slightly to 2.8% in 2016 and 2017. Inflation will average 0.8% for the year as a whole, before rising towards the end of the year. Earnings are expected to rise, government borrowing will fall and the increase in employment is set to continue.

Dr Ashcroft continued: “In Greater Manchester, we expect strong growth in the construction and services sectors with particularly strong growth in leisure and business services.

“Further afield, we forecast world growth of 2.9% in 2015 increasing to 3.1% in 2016. UK Inflation will average just 0.8%, CPI basis, over the balance of the year. Unemployment will continue to fall and government borrowing will also fall. The service sector will lead the recovery as manufacturing and construction output also rise.”

The forecast predicts a modest increase in manufacturing of around 2.5% with a 5.5% increase in construction activity as the strong housing market recovery continues. The trade figures will continue to disappoint, offset by a potential £5 billion oil dividend, as a result of the oil price collapse.