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Manchester Monitor November 2012

Recession ends but challenges remain

Little Change in Labour Market Picture Declining Domestic Demand Hits GM Firms Visitor Economy Sees Further Growth Housing Market Bumping Along the Bottom GM Continuing to See Falls in Crime www.neweconomymanchester.com research@neweconomymanchester.com


Monitor Focus Recession ends but challenges remain The recession may have officially ended, however Greater

One area in which GM continues to do well is the growth of

Manchester still faces a series of challenges as the UK

its visitor economy. For example, passenger numbers at

emerges from the economic downturn. In particular, the

Manchester Airport were recorded at 2.2million in August

latest Jobseeker’s Allowance (JSA) figures show that GM

2012 – 37,000 more than the same month 12 months ago.

has work to do in terms of boosting its labour market, while

Prospects for growth at the Airport also look good, with its

the Q3 2012 Quarterly Economic Survey (QES) produced by

potential takeover of Stansted and Ryanair launching flights

the Chamber of Commerce suggests that weakening

to five new destinations next summer, in a move that will

domestic demand has begun to hit firms in the second half

create up to 360 jobs. In addition, hotel occupancy rates in

of the year.

Manchester city centre were recorded at 81.7% in September 2012 – representing the best September

Approximately 84,900 people were claiming JSA in GM in

occupancy rate for the city centre since 2006.

September 2012, in line with the figure for August 2012 of 85,000. On an annual basis, however, the overall number of

The latest crime figures are also positive, showing that for the

JSA claimants is 2,400 (3.0%) higher in GM and it is

12 months ending September 2012 there were 18,300 fewer

therefore behind the curve compared to the North West and

victim-based crimes (violence, sexual offences, criminal

Great Britain, which have seen unemployment fall year-on-

damage & arson, and stealing), an annual decline of 9.9%.

year by 0.5% and 1.9% respectively. While the UK economy may have returned to growth, this The Q3 QES serves to highlight the ongoing challenges

month’s Monitor shows that the GM labour market and

faced by the business community. Gauging the opinions of

business base are still not out of the woods as it heads

more than 800 firms in GM, it highlights that the economy

towards the new year. The latest release of the Greater

stalled in the three months to September. Falling UK sales

Manchester Forecasting Model (GMFM) therefore comes at

and orders in both the manufacturing and service sectors

an opportune time – providing long-term employment and

indicate that the economy remains in a fragile state. Against

economic output estimates, it will highlight the clear

this backdrop, international markets have never been more

challenges facing GM but also the real opportunities for

important for GM, and the fact that the QES reports that

growth. Full details on future trends will be discussed at New

manufacturing exports are continuing to see growth is a very

Economy’s annual GMFM seminar, and further information

encouraging sign.

on the event can be found at: http://neweconomymanchester.com/stories/832-upcoming_events.

In other areas of the GM economy, the housing market is still struggling. On an annual basis prices have fallen for 22 successive months, with the average GM property now costing around £104,000. The latest sales data show that there were just under 2,200 properties sold in GM in July 2012 and there is little sign of life coming back to the market in the foreseeable future, with sellers increasingly having to re-price homes in order to try and attract buyers.

2 | Manchester Monitor – November 2012


Monitor Statistics Indicator

This Period

Last Period

Last Year

Period Change

Annual Change

9

12

12

-25.0%

-25.0%

Balance of manufacturing domestic sales

-2.0%

+1.0%

+9.0%

-3.0% pts

-11.0% pts

Balance of manufacturing domestic orders

-9.0%

-8.0%

0.0%

-1.0% pt

-9.0% pts

Balance of service domestic sales

+5.0%

+12.0%

+9.0%

-7.0% pts

-4.0% pts

Balance of service domestic orders

-1.0%

+3.0%

+2.0%

-4.0% pts

-3.0% pts

JSA Claimants

84,909

85,308

82,467

-0.2%

3.0%

Male

56,566

56,869

55,880

-0.5%

1.2%

Female

28,343

28,169

26,587

0.6%

6.6%

Youth Claimants (Aged 16-24)

25,010

24,835

26,895

0.7%

-7.0%

Long-Term Claimants (6 Months+)

38,165

38,760

31,430

-1.5%

21.4%

£104,257

£104,604

£105,759

-0.3%

-1.4%

2,163

2,098

2,396

3.1%

-9.7%

Housing benefit recipients

261,490

260,760

252,940

0.3%

3.4%

Council tax benefit recipients

314,150

313,890

308,070

0.1%

2.0%

2,214,089

2,181,479

2,177,227

1.5%

1.7%

Flights

15,734

15,810

15,814

-0.5%

-0.5%

Hotel Occupancy (city centre)

81.7%

65.6%

79.7%

16.1% pts

2.0% pts

Hotel Occupancy (GM)

79.8%

66.0%

80.1%

13.8% pts

-0.3% pts

Total Crime Volume

194,138

-

217,276

-

-10.6%

Victim-Based Crime Volume

165,760

-

184,020

-

-9.9%

Total Crime Solved Rate

31.3%

-

29.1%

-

2.2% pts

Victim-Based Crime Solved Rate

25.4%

-

22.8%

-

2.6% pts

Crimes per 1,000 population

76.2

-

84.2

-

-8.0

Total Deliberate Fires

8,130

-

10,993

-

-26.0%

Housing Monitor

People Monitor

Business Monitor

Business Deals

Average House Price Number Of Sales

Crime Monitor

Place Monitor

Manchester Airport Passengers

Positive change

Negative change

No change

Manchester Monitor – November 2012 | 3


People Monitor GM labour market remains stagnant The latest unemployment data show that 84,900 people were claiming Jobseeker’s Allowance (JSA) in GM in September 2012 – in line with the figure for August 2012 of 85,000. On an annual basis, however, the overall number of JSA claimants is 3.0% (2,400) higher, counter to declines seen at regional and national level. There were small monthly falls in JSA claimants at regional

As of September 2012, ILO unemployment amongst

(-0.6%) and national (-1.1%) levels. Of more significance,

people aged 16 and over in the region was recorded at

both the North West (-0.5%) and Great Britain (-1.9%) saw

8.4% in the quarter to August 2012, compared to 9.5% in

annual declines in the number of people claiming JSA

the quarter to May. While it remains above the UK average

claimants, in contrast to GM.

of 7.9%, the gap narrowed significantly, from 1.4 to 0.6 percentage points.

Youth unemployment (JSA claimants aged 16–24) in GM increased on a monthly basis between August and

While the two measures are clearly not comparable, regional

September by around 200 to approximately 25,000. More

falls in ILO unemployment will hopefully translate into

positively, on an annual basis the number of youth JSA

declines in JSA in GM, given the employment generating

claimants has fallen in GM by 1,900 (7.0%).

opportunities available here.

There was a fall in long-term (6 months+) claimants in GM

Total Jobseeker’s Allowance Claimants in September 2012

to 38,200 in September 2012, a monthly decline of 1.5% (-600). However, on an annual basis, the number of long-

84,909

term claimants remains substantially higher (21.4% or 6,700) than this time last year, mirroring the situation in the North West (+21.2%) and Great Britain (+16.7%) and

Increased by 3% year-on-year

highlighting the difficulty of people out-of-work getting back into employment. The Government’s official measure of unemployment uses the International Labour Organisation (ILO) definition, which

Jobseeker’s Allowance - Annual Change

h6.6%

h1.2%

$7.0%

h21.4%

Men

Youth

Long-term

is higher than the claimant count as it includes those that are unemployed but not claiming JSA. . This is only available down to a regional level but it does show that the number of people out-of-work in the North West is falling.

Women

4 | Manchester Monitor – November 2012


Business Monitor UK Sales for GM Businesses 20

UK Services Sales Q3 2012: +5%

10

Balance of Firms

0

-10 UK Manufacturing Sales Q3 2012: -2%

-20

-30

Start of first recession

-40

Q 213

112 Q 212

Q

411 Q

311 Q

111 Q 211

Q

410 Q

Q 310

210 Q

Q

110

409 Q

Q 209 Q 309

Q 408 Q 109

Q 208 Q 308

Q 108

-50

Falling domestic demand hits firms The Q3 Chamber of Commerce Quarterly Economic Survey (QES) gauges the opinions of more than 800 companies across GM. The findings from the QES suggest that the economy stalled in the three months to September, and that the recent fall in unemployment came to a halt, as public sector spending cuts and weak consumer demand took their toll. Manufacturing Sector

Services Sector

Domestic demand levels in the GM manufacturing sector

More positively, the GM service sector did see growth in

weakened in Q3 2012 according to the QES, with the

domestic sales. A positive balance of +5% in Q3 2012 was

balance of companies reporting growth in UK sales standing

recorded, although this was down significantly on +12% in

at -2%. This was the first time since Q2 2011 that the sector

the second quarter of the year. However, domestic orders in

recorded a negative value for domestic sales, although

the GM service sector had a negative balance of -1% in Q3

activity has been weakening since the turn of the year.

2012, down from the positive figures of +2% and +3% in Q1 and Q2 respectively.

The forward looking indicator of domestic orders for manufacturing in the QES remained broadly similar in Q3

Exports in the service sector also suffered in Q3, with a

2012 to the previous quarter, with a balance of -9%.

balance of -2% for sales and -4% for future orders. This was

However, there have now been five consecutive quarters

in stark contrast to the first half of the year, when both Q1

where order books have effectively been at zero or below.

and Q2 were still seeing positive growth in both indicators.

Export sales and orders for GM manufacturers remain

In relation to the downward trends seen in the QES, the

positive

Chamber notes that continuing uncertainty within Europe

however,

emphasising

international markets to growth.

the

importance

of

and the Eurozone debt crisis are likely to have been key contributors to the contracting measures.

Manchester Monitor – November 2012 | 5


Place Monitor Airport passenger numbers enjoy another strong month Passenger numbers at Manchester Airport continued their year-on-year rise in August, with the popularity of long-haul destinations helping to boost numbers. Hotel data also shows that occupancy levels in the city centre reached their highest September level since 2006. Airport Passenger Numbers

Hotel Occupancy

Passenger numbers at Manchester Airport were 2.21 million

Hotel occupancy rates in Manchester city centre were

in August 2012, compared to 2.18 million 12 months

recorded at 81.7% in September 2012, up by 2.0 percentage

previously, an increase of 1.7% (37,000 additional

points on an annual basis. This was the best September

passengers). Scheduled international routes saw growth of

occupancy rate for the city centre since 2006, and was

10.3%, while domestic services witnessed a 4.4% rise.

helped by a range of comedy, music, sporting and

Charter traffic declined by 13.1% on an annual basis.

conference events being held in the city. In particular, delegates arriving at the end of September for the Labour

Long-haul travellers flying to Las Vegas and Florida as well

Party Conference boosted occupancy.

as resorts in Mexico and Cuba were cited as key factors behind the increase in August.

For GM as a whole, average occupancy rates in September were 79.8%, down marginally on the 80.1% achieved 12

Looking at trends at other UK airports, passenger numbers

months previously.

at Birmingham grew by 9.1% between August 2011 and August 2012, London Gatwick saw a modest 0.3%

Important dates for hotel occupancy in September were:

increase, while London Heathrow suffered a decline of • 19 September – occupancy of 98% was achieved, with

1.9%.

Manchester United playing at home in the UEFA Prospects for growth over the rest of the year at Manchester

Champions League, the British Squash Grand Prix at the

Airport look good, especially following the recent

National Sport Centre and Manchester Central hosting a

announcement that Ryanair will introduce five new routes

European congress.

from next summer to Corfu, Lanzarote, Paphos (Cyprus), • 29 September – 98% occupancy was also reached when

Krakow and Trapani (Sicily).

Manchester United played at home in the Premier League In further significant news it has now been confirmed that

and Labour Party delegates started arriving in the city for

Manchester Airports Group (MAG) will be making a bid for

the opening of their annual conference.

Stansted Airport, which handles around 18 million passengers a year. A decision on the successful bidder is expected in 2013. Airport passenger numbers

(+1.7%)

Hotel occupancy (city centre)

2,214,089

81.7%

Flights

Hotel occupancy (GM)

(-0.5%)

15,734 % represents year-on-year change

6 | Manchester Monitor – November 2012

(+2.0%points)

(-0.3%points)

79.8%


Housing Monitor Average House Prices £400000

London £363,802

£350000 £300000 £250000 £200000

England & Wales £162,561

£150000

Greater Manchester £104,257

£100000 £50000 Sep-00

Sep-02

Sep-04

Sep-06

Sep-08

Sep-10

Sep-12

Housing market still flatlining The average house in GM cost £104,257 in September 2012, and properties have now been hovering around the £104,000– 106,000 mark for well over 12 months. With the number of homes being sold remaining flat, the deep inertia affecting the market is showing no sign of ending. House prices in England & Wales remained reasonably static

The latest house sales data for July show that total sales in

between August and September at £162,561 (a small

GM stood at 2,163, a small monthly rise of 3.1% (+65)

monthly decline of 0.3%). On an annual basis, house prices

compared with June, in contrast to a decline of 2.6%

actually grew by 1.1% (+£1,702) nationally.

nationally and a static trend regionally.

London continues to see the strongest increases in house

A recent report by property analyst Hometrack suggests that

prices with annual growth of 5.5% between September 2011

the housing market is likely to remain subdued for the

and 2012.

foreseeable future, with sellers increasingly having to reprice homes that are failing to attract buyers.

Looking at year-on-year house prices across GM, only Trafford (+0.4% or £800) saw any house price growth

Even the government's Funding for Lending scheme, which

between September 2011 and 2012. The other nine GM

is designed to encourage banks and building societies to

districts all saw declines, with the largest falls witnessed in

offer more loans, has thus far had little effect on the housing

Salford (-3.7%), Tameside (-3.5%), Rochdale (-2.3%) and

market. Analysts cite the high cost of underwriting loans as

Manchester (-2.2%)..

the key reason behind this view, which is forcing lenders to charge prohibitively high rates of interest to borrowers with small deposits.

Manchester Monitor – November 2012 | 7


Crime Monitor All Crime Offences per 1,000 Population, 2011-12

90 80

Year ending June 2012

Year ending June 2011

100

84.2

83.6 79.8 76.2

76.2

73.5 69.1

70 60

79.2

74.1 69.2

55.5 50.5

50 40 30 20 10 0 Greater Manchester

Merseyside

Northumbria

South Yorkshire

West Midlands

West Yorkshire

Police Force

Crime continues to fall in GM Data released by Her Majesty’s Inspectorate of Constabulary (HMIC) provide comparator information on crimes committed in GM with other similar constabulary areas in England & Wales. For the year ending June 2012, the number of offences committed per 1,000 population has fallen significantly in GM on an annual basis. Comparator Crime Data

Crime Volumes & Solved Rates

The HMIC data shows that for the 12 months to June 2012,

Figures provided by GM Police for the year ending 30

there were 76.2 offences committed in GM per 1,000

September 2012 show that there were 23,100 fewer

population.

offences in GM, a year-on-year decline of 10.6%, down to just over 194,000 reported crimes. Victim-based crime

Looking at similar forces in England and Wales, the figure is below that for West Yorkshire (Leeds city region, at 79.2 offences), but above Merseyside (69.1), Northumbria (50.5), South Yorkshire (74.1), and the West Midlands (69.2). More positively however, there were 8.0 fewer offences per 1,000 population in GM for the year ending June 2012 than 12 months previously. With the exception of the West

(violence, sexual offences, criminal damage & arson and stealing) accounted for 85% of all offences, with approximately 166,000 cases, an annual fall of 9.9% (-18,300). Fire & Rescue Service Data Deliberate fires in GM fell substantially by 26% (2,900 fewer) over the year to September 2012, declining to 8,100.

Midlands constabulary (10.6 fewer offences on an annual basis), this was a higher fall than any other comparable

Primary fires, which are fires where owned property is

force, where year-on-year falls ranged from 2.1 fewer

involved, fell by 580 to 1,900 for the year ending September

offences (South Yorkshire) to 5.0 (Northumbria).

2012, a similarly large decline of 23.2%.

8 | Manchester Monitor – November 2012


Manchester Monitor - November 2012