Issuu on Google+

Manchester Monitor Quarterly July 2013

Greater Manchester’s Growing Low Carbon Sector

Jobseeker numbers fall Office rents increase Hotel occupancy remains steady Airport passengers continue to increase Crime continues to fall www.neweconomymanchester.com research@neweconomymanchester.com


Monitor Focus Greater Manchester’s Growing Low Carbon Sector This edition of the Manchester Monitor Quarterly includes a

remain static, with Cushman & Wakefield predicting that

detailed feature on the low carbon and environmental goods

there is likely to be little change in the coming months, with

and services (LCEGS) sector in Greater Manchester (GM),

the potential for another challenging year.

drawing on analysis by kMatrix and Gyron that outlines the conurbation’s strengths in this increasingly important part of the economy.

The latest Land Registry data showed that house prices have fallen in GM year-on-year by 2.3% (£2,390). The average house now costs £102,569, Nationally there is a

GM is home to the third largest LCEGS sector in the country

slight increase in house prices, although this is largely driven

with total annual sales in 2011/12 of £5.4billion, behind only

by London, with the gap between house prices in the capital

London and the South East. Around 2,000 businesses in the

and the rest of the country wider than ever before. Across

conurbation are working in the sector, employing 37,000

GM, only Trafford and Manchester saw increasing prices.

people. Low carbon is a particular specialism for GM, accounting for £2.9billion of sales, followed by renewable energy (£1.5billion) and environmental (£981million). The LCEGS sector in GM grew by 4% in 2011/12, outperforming the UK economy throughout the recession, and it is predicted to continue to grow at a similar pace for the next three years. The biggest opportunities in GM are expected

The

latest

crime

figures

for

GM

provide

further

encouragement, with figures for the year ending May 2013 showing that there were around 179,000 reported crimes in the conurbation – an annual decline of 11.4%, or almost 23,000 fewer offences. GM’s visitor economy remained steady in May, with city

to be for engineering companies to diversify in the renewable

centre hotel occupancy staying at 75%, the same level as

energy industry, particularly in the wind, biomass and

was seen last year. This month also saw the release of the

geothermal sub-sectors.

top 10 visitor attractions in Greater Manchester in 2012. The

Turning to the latest Greater Manchester data, the labour market in GM is seeing signs of improvement, with 82,400 people claiming Jobseeker’s Allowance (JSA) in May 2013 – an decrease of around 1,500 (1.8%) from April 2013. Youth unemployment in Greater Manchester also declined on a monthly basis between April and May, falling by approximately 650 to 21,800. The number of youth JSA claimants is 14.1% (3,600) lower than this time last year.

Lowry returned to the top of the table, with nearly 820,000 visitors over the year, followed by the MOSI, which saw nearly 677,000 visitors. Growth at Manchester Airport is continuing, with 1.52million passenger numbers passing through the Airport in April 2013. This was up by 3.5% (51,000) on the same month last year and reflects the increased number of destinations that people can fly to such as Washington DC and Moscow. In addition, the role played by the Airport’s “Fly Manchester” Campaign, which has

New data released by Cushman & Wakefield give some

sought to raise awareness of Manchester as home to the

cause for optimism in terms of the office market. Headline

most low cost flights in the North, has also been important

rents for prime office space in Manchester have varied

in driving growth.

between £27 and £30 per sq. ft since 2008, but have risen to £30.00 per sq. ft in Q1 2013 up from the £29.00 per sq. ft reported 12 months previously and from the £28.50 seen in the previous quarter. Both industrial rents and retail rents

1

http://www.gmpcc.org.uk/wp-content/uploads/2013/03/CrimePlan.pdf

1 | Manchester Monitor – July 2013


Business Monitor

Monitor Statistics Indicator

This Period

Office take-up in Manchester

£30.00/sq. ft £28.50/sq. ft £30.00/sq. ft

Office supply in Manchester

£5.50/sq. ft

Prime office rents in Manchester

Crime Monitor

Place Monitor

Housing Monitor

People Monitor

JSA Claimants

Last Period

£5.50/sq. ft

Last Year

Period Change

Annual Change

£5.50/sq. ft

£250.00/sq. ft £250.00/sq. ft £250.00/sq. ft 82,428

83,960

84,432

-2.8%

-5.3%

Male

55,288

56,351

58,588

-2.9%

-9.1%

Female

27,140

27,609

25,844

-2.7%

-0.6%

Youth Claimants (Aged 16-24)

21,615

22,260

25,245

-4.0%

-14.9%

Long-Term Claimants (6 Months+)

38,845

38,525

38,845

0.7%

-3.3%

£101,035

£101,759

£104,675

-0.7%

-3.5%

1,742

1,616

1,788

7.8%

-2.6%

1,522,962

1,477,178

1,470,379

8.8%

-3.3%

Flights

12,950

11,906

12,864

5.2%

3.5%

Hotel Occupancy (city centre)

74.7%

75.4%

74.5%

-0.7% pts

0.2% pts

Hotel Occupancy (GM)

74.2%

74.7%

73.8%

-0.5% pts

0.4% pts

Total Crime Volume

197,042

-

202,010

-

-11.4%

Victim-Based Crime Volume

160,064

-

175,959

-

-9.5%

Total Crime Solved Rate

29.7%

-

31.3%

-

-1.6% pts

Victim-Based Crime Solved Rate

24.0%

-

24.7%

-

-0.7% pts

Total Deliberate Fires

8,646

-

9,278

-

-6.8%

Average House Price

Number Of Sales Manchester Airport Passengers

Positive change

Negative change

No change

Manchester Monitor – July 2013 | 2


People Monitor Jobseeker numbers decrease again The latest figures show that 82,400 people were claiming Jobseeker’s Allowance (JSA) in Greater Manchester (GM) in May 2013 – a decrease of 1,500 (1.8%) when compared with the figure for April 2013 of 84,000. The North West (2.6%) and Great Britain (2.8%) also saw monthly decreases. As a proportion of the resident working age population, 4.7% of people in GM were claiming JSA in May. This is still above the North West (4.1%) and Great Britain (3.6%) averages. The number of male JSA claimants in GM decreased on a

A related piece of research by the Chartered Institute of

monthly basis by 1.9% (1,100) to 55,300, while the number

Personnel and Development (CIPD) shows that competition

of female claimants fell by 1.7% (500) to 27,100.

for skilled labour across the UK is increasing, illustrating that people with the right qualifications can be successful even

There was a year-on-year fall in male JSA claimants in GM

during the current period of economic uncertainty.

of 3,300 (5.6%), however female claimants saw and increase of 5% (1,300) between May 2012 and May 2013.

The CIPD’s annual survey of employers shows that there was a three fold increase in competition for well qualified

Youth unemployment (JSA claimants aged 16-24) in Greater Manchester declined on a monthly basis between April and

talent, with over 60% of organisations surveyed indicating that they had experienced difficulties filling vacancies.

May, falling by approximately 650 to around 21,800. Yearon-year, the number of youth JSA claimants is 14.1% (3,600)

Total Jobseeker’s Allowance Claimants in May 2013

lower than this time last year. There was an increase in longterm (6 months+) claimants in Greater Manchester in May basis the number of long-term claimants is virtually the same

82,428

as this time last year. The North West (2.5%) and Great

Decreased by 1.8% year-on-year

2013 to 38,800, a monthly rise of 300 (0.8%). On an annual

Britain (3.3%) saw annual declines in long-term claimants. The falling JSA figures this month are encouraging, although the economic climate still holds significant challenges for the

Jobseeker’s Allowance - Annual Change

h5.0%

$5.6%

$14.1%

0%

Men

Youth

Long-term

UK labour market. In particular, the OECD recently drew attention to the large number of young people who are not in education, work or training (NEET). During the first quarter of 2013 there were over one million NEET young people in the UK. The report by the European think tank goes on to argue that the financial downturn has widened the gap between those with and those without a good level of qualification, putting more pressure on unemployed young people.

3 | Manchester Monitor – July 2013

Women


Business Monitor Prime Rents, March 2013 (£/sq. ft) Area

Office

Industrial

Retail

Manchester

£30.00

£5.50

£250.00

Birmingham

£27.50

£5.75

£250.00

Bristol

£27.50

£7.75

-

Leeds

£24.50

£5.00

£250.00

Edinburgh

£27.00

£7.25

£190.00

Positive change

Negative change

No change

Commercial property market sees signs of improvement Cushman & Wakefield (C&W) has released its first quarter 2013 analysis of the office, industrial and retail markets. The latest figures show that on an annual basis rents for industrial and retail space have held steady. However, breaking the trend from the previous two quarters, rents for office space have increased slightly on an annual basis, as well as rising on a quarterly basis. Analysis of the figures highlights some quarterly fluctuations

continued to outperform the rest of the country, with strong

in rental levels in the office market. Headline rents for prime

demand exceeding supply. Much of this imbalance is driven

office space in Manchester have varied between £27 and

by international retailers, and luxury brands looking for

£30 per sq. ft since 2008. They were £30.00 per sq. ft in Q1

flagship stores.

2013, up from the £29.00 per sq. ft reported 12 months previously and from the £28.50 seen in the previous quarter.

There is cause for optimism in Manchester’s retail market, as the Central Retail Park on Great Ancoats Street is set for

Industrial rents in Manchester have now stood at £5.50 per

a significant redevelopment following the award of planning

sq. ft since Q3 2010. C&W notes that demand remains

permission in early June. The new shopping centre will

stable across the UK, but that a lack of supply in London

create an important new link between the city centre and

and the South East has benefited other areas, including the

communities in east Manchester as well as creating between

East Midlands, indicating the potential for Manchester to

350 and 400 jobs at a new supermarket. The plans also

benefit in the future as supply decreases in these markets.

include a cinema and several smaller shops.

Overall, prime rents remain stable in all but a few areas of the country.

In other significant property news, the Co-operative Group has announced that it will continue with its NOMA city centre

Prime retail rents in Manchester remain steady at £250.00

development by itself after parting ways with developers

per sq. ft and have stayed the same for nine consecutive

Delancey and Landid. The £800 million, 20 acre property

quarters, since Q3 2010. C&W notes that rents in the retail

scheme will take up a significant portion of Manchester City

sector are likely to remain largely stable, though warn that

Centre. Plans for the development include the new Co-op

2013 will likely be another challenging year with potential

headquarters, as well as 100,000 sq. ft of offices and 30,000

growth only in select locations. Prime retail in London

sq. ft of retail space, creating 900 jobs.

Manchester Monitor – July 2013 | 4


Focus on the Greater Manchester low carbon and environment sector A report recently produced report on the low carbon and environmental goods and services (LCEGS) sector in Greater Manchester that sets out the conurbation’s key strengths in this increasingly important part of the economy. The research was undertaken on behalf of the Environmental Sustainability Technical Assistance (ESTA) project by kMatrix and Gyron.

Introduction LCEGS is not a ‘sector’ in the traditional sense, but a flexible

As shown in Figure 1, the largest of the three broad sub-

‘umbrella’ term for capturing disparate low carbon,

sectors in terms of sales in GM is Low Carbon, which

environmental and renewable energy activities spread

accounts for £2.9 billion sales (54% of the sector total),

across

transport,

Activities include building technologies and nuclear power,

construction, and energy. The definition used in the report

which accounted for £700million and £286miilion of low

includes 2,800 products and service activities that derive

carbon sales in GM respectively in 2011/12.

many

existing

sectors

such

as

from sector supply chain and value chain activities.

Renewable energy recorded £1.5 billion of sales (28% share)

The overall sector has been defined using 24 different

in GM in 2011/12, with wind power accounting for almost

categories, which are structured under three broad

half this figure at over £700million.

sub-sectors: Low carbon; Renewable energy; and Environmental.

The environmental sub-sector had sales of £981million in GM in 2011/12, with recovery & recycling representing £370million of this.

LCEGS in Numbers In total, the LCEGS sector in GM employs 37,000 people across 2,000 businesses. Sector sales grew by 4% in 2011/12 to reach £5.4billion, although staff numbers remained static. Exports in the sector grew by 2.9% between 2010/11 and 2011/12 to £529million.

Figure 1: LCEGS Sales across Greater Manchester, 2011/12 £3,500 Share of LCEGS sales in GM 54% Low Carbon 28% Renewable Energy Sector 18% Environmental

£3,000

Sales, 2011/12 (£ million)

£2,500

£2,000

£1,500

£2,944

£1,000 £1,521 £500

£981

£0 Low Carbon

5 | Manchester Monitor – July 2013

Renewable Energy Sector

Environmental


Greater Manchester’s Growing Low Carbon Sector National comparisons The report also allows for GM to be compared against other

Leeds City Region which has £1.54 billion in sales. Once

LEPs areas in England and the conurbation performs well in

again London and the South East take the top two spots in

this respect. It accounted for 5% (£5.4 billion) of all LCEGS

this sub-sector.

sales in 2011/12, making it the best performing LEP area outside London and the South East (which had £31.5 billion

For the Environmental sub-sector, Greater Manchester also has the fourth largest concentration in the country. Third

in sales combined).

place is held by the South East with £1.2 billion in sales, Figure 2 highlights GM’s performance relative to other LEPs

while the Leeds City Region has the second largest

around the country. Only the Leeds City Region has a similar

concentration behind London, with £1.4 billion in sales.

level of sales to the conurbation. In other areas, such as Greater Birmingham and Solihull, sales in the LCEGS sector totalled £3.8billion, while Liverpool City region and Sheffield City Region both recorded sales figures of around

The Future for LCEGS The sector’s growth rate in GM outperformed the UK economy throughout the recession and it is predicted to continue to grow according to the report. In 2012/13 its

£2.65billion.

growth rate is forecast to be 4.1%, rising to 4.3% in 2013/14 In a national context, Greater Manchester has a particular

and then to 4.4% in 2014/15.

speciality in the Low Carbon sub-sector, which is also the third largest in the country, behind London and the South East, and accounting for £2.9 billion of sales in 2011/12. GM’s nearest competitors in this sub-sector are Leeds City Region (£2.5 billion) and the North Eastern LEP (£2.3 billion).

In terms of specific areas for GM to focus on, the report highlights that there are opportunities for companies from engineering, manufacturing, process and professional services to diversify into the LCEGS sector. The biggest opportunities are expected to be for engineering companies

In terms of the Renewable Energy sub-sector, GM is fourth

to diversify in the renewable energy industry, particularly in

largest in the country with £1.52 billion of sales, just behind

the wind, biomass and geothermal sub-sectors.

Figure 2: LCEGS Sales in Greater Manchester and comparator LEPs £6,000

Total Sales, 2011/12 (£ millions)

£5,000

£4,000

£3,000 £5,446

£5,395

£2,000

£3,833 £2,651

£2,651

Liverpool City Region

Sheffield City Region

£1,000

£0 Greater Manchester

Leeds City Region

Great Birmingham & Solihull

London and the South East sales = £31,532,000 Source: kMatrix & Gyron 2013

Manchester Monitor – July 2013 | 6


Place Monitor Airport growth continues Passenger numbers at Manchester Airport are still growing on an annual basis, reflecting the increased number of destinations on offer and also the recent “Fly Manchester” campaign which has raised awareness on the number of low cost flights from Manchester. Hotel data show that occupancy levels both in the city centre and GM in May 2013 are roughly the same as in the same period in 2012. Airport Passenger Numbers Manchester Airport handled 1.52 million passengers in April 2013, compared to 1.47 million 12 months previously. This represented an increase of 3.5% (51,300 additional passengers). Once again this makes Manchester Airport the fastest growing of the UK’s major airports and reflects the increased number of destinations that people can fly to, such as Washington DC and Moscow. The role played by the Airport’s “Fly Manchester” Campaign, which has sought to raise awareness of Manchester as home to the most low cost flights in the North, has also been important. The trend at Manchester Airport compares particularly well to some of its main competitors across the country, notably Gatwick where annual passenger numbers increased by just 0.4%. Airport passenger numbers actually fell at Heathrow, which saw annual decline of 0.8%, and Birmingham where they declined by 7.4%. Stansted Airport, which is now owned by Manchester Airports Group, grew by 3% (+46,000) between April 2012 and 2013. All indications are that passenger growth at Manchester Airport will continue over the coming year, with Thomson Airways recently bringing their new bar-setting 787 Dreamliner aircraft to the airport for the first time, ahead of its first passenger flight on July 8. Thompson flights will connect Manchester Airport with several destinations in North and Central America, including Cancun in Mexico and Sanford, Florida.

Airport passenger numbers

(+3.5%)

Hotel Occupancy Hotel occupancy rates in Manchester city centre were recorded at 75% in May 2013, the same level as 12 months previously. Weekend occupancy in the city centre averaged 79% during the month, a slight decrease on the 80% seen in at the same time last year. For GM as a whole, average occupancy rates in May were 74%, which was also in line with the same period in 2012. There were several events throughout the month that helped to drive hotel occupancy: • 25h March – occupancy of 98% was achieved, due to several events including the Rugby League Magic Weekend, the Manchester Sharks Water Polo European Tournament and Meatloaf at the Manchester Arena. • 4h May – occupancy of 97% with Manchester United v Chelsea, The Big Reunion and the Quays Food and Drink Festival. Details on the top 10 visitor attractions in GM for 2012 were released in June. The list was topped by the Lowry with nearly 820,000 visitors, followed by the Museum of Science and Industry with nearly 677,000 visitors. Other key attractions include the Chill Factore (451,000), Manchester Art Gallery (387,000) and the Bolton Museum (367,000).

Hotel occupancy (city centre)

1,529,053

75%

Flights

Hotel occupancy (GM)

(-3.2%)

12,950

74%

% represents year-on-year change IMPORTANT NOTE: The source of the hotel occupancy data referenced in this newsletter is STR Global Ltd. Republication or other reuse of this data without the express written permission of STR Global is strictly prohibited.

7 | Manchester Monitor – July 2013

(0% pts)

(+0.4% pts)


Housing Monitor House prices 2008-2013 180,000

160,000

140,000

120,000

100,000 May 2008

May 2009

GM

May 2010

North West

May 2011

May 2012

May 2013

England and Wales

GM housing market continues to decline The average house in GM cost £102,569 in May 2013 based on the latest data released by the Land Registry, falling by 2.3% (£2,390) when compared with 12 months previously. Nationally there is a slight increase in house prices, although this is largely driven by London where housing prices are once again pulling away from the rest of the UK.

House prices in England & Wales remained fairly static at £161,969 in May, up very slightly on the April average of £161,755. On an annual basis, house prices grew by 0.5% (+£836) nationally. London continues to see annual house price increases, with the average cost of a property rising by 5.0% (+£17,961) to reach £375,068 over the 12 months to May 2013. Recent released research by the Nationwide building society showed that the gap between house prices in London and the rest of the UK is the widest that it has ever been. Prices in London are now 5% above the peak reached in 2007, while prices across the rest of the UK were still 9% lower than in 2007. Across other regions prices varied widely, but London appears to now operate as a separate market from the rest of the country.

Across GM, only Trafford (+3.3% or £5,290) and Manchester (+0.6%, or £965) saw any house price growth between May 2012 and 2013. The other eight GM districts all saw declines, with the largest falls witnessed in Salford (-9.1%), Oldham (-5.8%) and Rochdale (-5.2%). The latest house sales data for March 2013 show that total sales in GM stood at 2,023, representing a significant monthly rise of 13.9% (+247), but a substantial annual decline of 16.8% (-322). House sales nationally also fell significantly – by 17.5% and 17.0% on a monthly and yearly basis respectively.

Manchester Monitor – July 2013 | 7


Crime Monitor Crime Volumes in Greater Manchester

26,051

175,959

Year to May 2012

0

50,000

100,000

Victim based crime

Totel crimes 179,042

18,978

160,064

Year to May 2013

150,000

Total Crimes 202,010

200,000

250,000

Non-victim based crime, fraud & forgery

Crime volumes see further decline Data released by GM Police (GMP) for the year ending May 2013 show that the number of reported crimes is continuing to fall, declining by over 11% over the last 12 months. The new data also reveal that 29.7% of all crimes were solved in GM over the past year, 1.6 percentage points lower than May 2012.

Crime Volumes Figures for the year ending May 2013 show that there were around 179,000 reported crimes in GM – an annual decline of 11.4%, almost 23,000 fewer offences.

In terms of victim-based crime (violence, sexual offences, criminal damage & Arson and stealing), 24.0% of cases were solved over the 12 months to May 2013, a marginal year-onyear fall of 0.7 percentage points.

Victim-based crime saw just over 160,000 cases recorded over the same period, representing a year-on-year fall of 9.0%

GM Fire & Rescue Service Data Deliberate fires in GM were recorded at 8,646 for the 12 months to May 2013, compared to a figure of 9,278 for the previous year, an annual decline of 6.8% (632).

(15,900). Criminal damage and arson saw the biggest yearon-year fall of all victim-based crimes, with 28,900 offences for the 12 months to May 2013, down by 15.5% (5,290) on the 2012 figure. Crimes Solved GMP successfully solved 29.7% of all crimes for the year ending May 2013 – a slight decline of 1.6 percentage points compared to the previous 12 months.

8 | Manchester Monitor – July 2013

Primary fires, those where owned property is involved, were recorded at 5,019 for the year ending May 2013, a year-onyear fall of 13.6% (-789).


Manchester Monitor July 2013