The outlook of Greater Manchester’s economy is ‘reasonably promising’ for the year ahead, one of the region’s leading economists said today.
Earlier this week Chancellor George Osborne said the British economy was moving out of ‘intensive care and from rescue to recovery’ – a stance shared by Manchester’s Chamber of Commerce.
Dr John Ashcroft, chief economist of the chamber, said the region’s Quarterly Economic Survey (QES) showed promising signs for the rest of the year.
He said: “We had an incredible shock to the economy in 2008, but after a classic recovery, it now looks reasonably promising for the year ahead.”
Dr Ashcroft, presenting the QES to a number of leading businesses at a breakfast meeting this morning, said the Greater Manchester economy is a significant contributor to the UK’s financial recovery.
The second estimate of GDP in the first quarter suggested growth of 0.6% year-on-year, a figure that may be as high as 1% in the second quarter.
Unemployment is also falling, with the claimant count now standing at 83,000 after peaking at 87,000 in the first quarter last year.
Dr Ashcroft added: “Our composite leading indicator suggests another period of growth into the second quarter of the year.
“The prospects for employment also continue to improve, albeit at a modest pace.”
These figures come after the Office for National Statistics (ONS) provided revised figures yesterday that confirmed the UK did not experience a double-dip recession in the first quarter of 2012.
However, the survey’s data suggests inflation may fall faster than most analytics expect, with fears about inflation falling in the manufacturing and service sectors.
The survey found that businesses were less worried about inflation, taxation, interest and business rates, but more concerned with competition and exchange rates.
He said: “Despite the Prime Ministers claims, we’re not going to see a resurgence in manufacturing.
“The Chancellor may wish to rebalance the economy and the Prime Minister may wish to re-industrialise Great Britain. Ambition indeed, but lessons from history can help.”
In 1870, 36% of the workforce was engaged in manufacturing, by the end of the current year the figure will be nearer to 8%.
UK car manufacturing is recovering and may hit just under 1.5 million units this year – but over 80% of the output is assembled for the export market from parts, many of which are imported from abroad.
He added: “Manufacturing remains vitally important, as indeed is any sector maintaining employment.
“The reality is, it is the service sector that will continue to lead the output recovery in the UK as has been evidenced to date.”
More than 700 businesses from Greater Manchester responded to the survey, which forms the largest part of the national British Chambers of Commerce QES.
Image courtesy of manchestermbs via YouTube, with thanks.
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