Greater Manchester’s economy uncertain, says report

Greater Manchester's hotel occupancy levels dropped and its housing market continued to struggle in April, according to new market research.

In New Economy's latest edition of the Manchester Monitor released on Monday, it said the average cost of a house in the area in April was £107,751, which is £3,000 cheaper than in April 2010, a decline of 2.8% on last year's figure.

The report said the average price in Greater Manchester currently stands at 66% of the average house price nationally of £163,083.

New Economy said a decline in buyer confidence, coupled with the conflicting views on future house prices and buying trends, make it increasingly challenging to predict when the housing market in Greater Manchester will begin to recover.

The report said hotel occupancy rates have dropped 2.7% year-on-year, down to 68.5% in the city centre in April 2011.

However, New Economy said the dip was largely due to Easter falling later this year than in 2010.

Average weekend occupancy rates in the city centre were higher in April 2011 at 82% when compared to the corresponding figures 12 months ago.

The city centre weekday average was 69%, with the Easter bank holidays and the three day weeks created by the Royal Wedding having a significant impact on conference and business visits to Greater Manchester.

To add more gloom, the report said there were only five business deals, including mergers and acquisitions, recorded in April, the lowest figure in 2011 so far. This compares to 13 in April last year and 17 in April 2009. The number of deals fell by more than 60% annually in Greater Manchester.

New Economy said, in both March and April, around 250 businesses experienced at least one judgment against them, higher than the number recorded for the first two months of 2011.

During the first quarter of 2011, the report said 213 businesses in Greater Manchester were issued with winding up orders, accounting for nearly three quarters of the North West total. This was higher than the figure for the fourth quarter of 2010 of 166; however, it is lower than the corresponding numbers for the first quarters of 2009 and 2010, of 356 and 248 respectively.

Baron Frankal, director of economic strategy at New Economy, said: "June's monitor shows another mixed message for 2011. However, it's still widely recognised that the economy is going through an extremely uncertain period and the stats show increasingly compelling circumstantial evidence that any economic recovery is stalling.

"There are calls for the newly created LEPs in places like Greater Manchester to be given more financial power to drive economic growth – suggesting that there is a consensus to gain a tighter grip of the economy."

On a more positive note, the research showed an increase in turnover in retail businesses in Manchester city centre.

Figures provided by CityCo indicate that retail turnover increased by 2.7% in the year up to March 2011, but this is in the context of an annual fall of 3.5% nationally.

Using the latest data published by the Civil Aviation Authority, research also showed passenger numbers at Manchester Airport increasing by 12.8% between February and March, an increase of 137,000 passengers, which New Economy said is the highest monthly increase since May and June 2010.

New Economy works with the ten local authorities of Greater Manchester, as well as other public sector organisations, businesses and universities across Manchester.

Established in 2009, New Economy is one of the six Association of Greater Manchester Authorities commissions.

The Greater Manchester Combined Authority was launched in April. AGMA continues to act as the voice of the ten local authorities of Greater Manchester as part of a partnership with GMCA.

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