The Greater Manchester economy has shown signs of improvement in the last three months according to a survey of businesses conducted by the Greater Manchester Chamber of Commerce.
In the Chamber’s latest Quarterly Economic Survey, the Greater Manchester Index measure of business activity rose by 13.5 points, after a sharp fall in the previous quarter.
The survey of 324 businesses from across the city-region found sales to UK customers increased in both the services and construction sectors, with B2C businesses reporting an overall increase in sales over the past three months.
Despite this, the manufacturing sector remained well below last year’s output, and export sales showed further decline.
Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said:
“Although inflation, higher food prices and mortgage payments have squeezed household budgets, anecdotal evidence supports the main findings of the QES. Spending during Black Friday sales contributed to an uptick in service sector activity. So has increased hospitality spend in the lead up to the festive season. It is also likely that the FIFA World Cup, particularly the progression of the England football team, led to increased patronage at pubs and bars giving a boost to the hospitality sector. However, the post-Christmas period presents some concerns. There are valid questions around the ability of households to sustain consumer spending beyond the festive season, which could affect economic growth and business sentiment.”
The Quarterly Economic Survey also showed further weakening in other important indicators such as cash positions, investment intentions and business confidence. Business in all three sector groups report diminishing cash positions, which has hampered their ability to invest in new equipment and machinery. Businesses face higher operational costs, but the latest survey results show that businesses are either unwilling or unable to increase their selling prices, which means they are having to absorb more costs and face lower margins.
“The loss of confidence and weakening in other QES measures does not bode well for business investment in the medium-term. The Chamber of Commerce network’s economic forecast indicates that business investment will continue to lag. Recent changes to the R&D tax credit scheme for SMEs is not going to help. The Autumn Statement has provided some stability and calmed the markets. The next intervention from government must be to come up with measures to trigger business investment and secure sustainable economic growth.”