Manchester Monitor February 2015 Domestic demand helping to drive growth
Jobseekers numbers fall again Services and manufacturing boosted by domestic demand Housing market shows slight growth Hotel occupancy peaks in 2014 Record annual decline in assault patients www.neweconomymanchester.com research@neweconomymanchester.com
Monitor Focus Domestic demand helping to drive growth The Quarterly Economic Survey (QES) by the GM Chamber of Commerce gauges the opinion of more than 500 companies across GM. The latest results show a 10-year record balance – positive minus negative responses – for UK orders and sales in the service sector, the continuation of a highly positive trend. Some indicators however point to a possible skills shortage, with recruitment difficulties recorded at a five year high. The manufacturing sector also has an encouraging pipeline of UK orders, and while export orders are weaker than in previous quarters, they do remain positive. GDP data by the Office of National Statistics offer an ambiguous picture, showing the highest annual growth rate (2.6%) since 2007, but at a slower rate than the previous quarters, indicating that growth might be stalling. In the Q4 2014, according to preliminary estimates (with 44% of the data available needed for the final estimate), UK GDP grew by 0.5%, down from a quarter-on-quarter growth of 0.7% in Q3. Growth was mostly due to the service sector (+0.8%), while production and construction contracted, making efforts to rebalance the economy from reliance on consumption and services more challenging. This seems to mirror downside risks stemming from sluggish economic development in major export markets in the Eurozone – which entered into deflation in December – but also from easing growth in China and emerging economies. Sounding a note of caution, the Markit Purchasing Managers’ Index (PMI), for the North West was recorded at a 20-month low in December and was below all other English regions. The PMI looks at overall business activity – and while it fell in the North West, it was recorded at 54.1 and remains above the no-change threshold of 50.0, indicating moderate expansion of business activity. The latest figures from the Annual Population Survey show an ILO unemployment rate in GM of 8.1% (107,000) for the 12 month up to September 2014, a decrease by one percentage point (12,000) over the same period one year earlier. This is still markedly higher than for the UK (6.6%)
1 | Manchester Monitor – February 2015
and the North West (7.5%). Additionally, the economic activity rate – those either in work or looking for work (excluding people who are unable to work for health reasons, those in full time education etc.) – in GM was recorded at 74.7%, 2.8 percentage points below the UK rate of 77.5%. Switching to look at the other labour market indicator of Jobseeker’s Allowance (JSA), around 35,500 people in GM were claiming JSA in GM in December 2014. A further 11,900 people were claiming Universal Credit (UC) in GM in the same month. Of these, 7,890 were out of work and in the absence of UC are likely to have been claiming JSA. Adding this figure to the JSA number gives a combined JSA/UC total in GM of just under 44,400 in December 2014 – an annual decline of around 33.0%. Turning to the visitor economy, Manchester Airport handled 1.39 million passengers in November 2014, 73,600 (5.6%) higher than 12 months previously. The figures for December are expected to reach the 22 million mark, a figure not achieved since 2007. The average hotel occupancy rate in for GM as a whole, in December was 73.4%, a rise of 2.4 percentage points compared to 2013, and together with the airport passenger numbers the data highlight the ongoing strength of GM’s visitor economy. Latest data from the Land Registry show that the average house in GM cost just under £108,000 in December 2014, an increase of 3.8% (£3,951) from this time last year, though lower than the growth seen in England & Wales of 7.0% (£7,063), where prices reached just under £177,800. Ending with a regular look at crime data, GM’s hospitals have reported a year-on-year decline in the number of people being treated for assault-related injuries over the last twelve months of 7.5% on the figures from November 2013. In actual terms, this is the second lowest rolling figure since records began five years ago, beaten only by last month’s figure.
Monitor Dashboard Jobseeker’s Allowance (JSA) claimants
Airport Passengers
39.7%
5.6%
since last year
UK Orders in GM Firms
since November 2013
Hotel Occupancy
36% the balance of GM
manufacturing companies reporting increasing UK orders. International orders at +12%
House Prices
2.4%pts on December 2013
Crime (Assault Attendances in GM)
3.8%
since December 2013
7.5%
since November 2013
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People Monitor Further decline in unemployment The latest figures show that 35,500 people were claiming Jobseeker’s Allowance (JSA) in Greater Manchester (GM) in December 2014, down by 39.7% (25,100) on a yearly basis. According to the ILO measure, unemployment stands at 8.1% – a decrease of one percentage point over the same period a year earlier. JSA Claimants Around 2.0% of the resident working age population (including the economically inactive) in GM were claiming JSA in December, slightly above the rate recorded for Great Britain of 1.9%. It is important to note that Universal Credit (UC) – whose claimants are not included in the JSA figures – has been rolled out in the North West first, with just under 89.0% of all UC claimants residing the region – which has impacted on JSA trends over the last 12 months. Of the 35,500 people in GM claiming JSA in December, 6,650 were young people (those aged 16-24). Universal Credit Data sourced from the Department for Work and Pensions (DWP) show that there were 11,930 people in GM claiming UC in December 2014, of which 7,890 (or 66.1%) were unemployed. These people are not included in JSA claimant count statistics, meaning that analysing the unemployment outlook based purely on trends in JSA claimants may look more flattering than it actually is. It is likely that these claimants would be receiving JSA in the absence of UC, meaning the 7,890 people claiming UC need to be added to the JSA figure in order to establish the number of people claiming unemployment-related benefits. This gives a combined JSA/UC total of over 43,380 in December 2014, a decline of approximately 4.5% on the number over November (45,400). On an annual basis, JSA/UC claimant numbers in GM have declined by around 33.0% (down from 64,670 in December 2013). This is less than the 39.7% decline for JSA claimants, although it still represents a substantial fall over 12 months and highlights the ongoing economic recovery. Recent research1 published by Oxford University and the London School of Hygiene & Tropical Medicine highlights that the claimant count can be affected by changes in regulations on benefit entitlement. Looking at the national picture the research reveals that since the welfare reforms in
2011, of those JSA claimants being sanctioned by withdrawal of payments (i.e. for non-compliance), more than 40% stopped claiming benefits. This compares to 11.8% pre-2011. In addition, of those 40%+ who stopped claiming benefits, less than 1 in 5 actually entered the workforce. This highlights the importance of looking at a range of indicators when assessing unemployment trends, which includes the alternative measure produced by the International Labour Organisation. ILO Unemployment This alternative to the claimant count figures as a way of analysing trends in unemployment, records the rate of people, who currently do not have a job, amongst those who are 16 or older and who are economically active. Unlike the JSA claimant rate, it includes those of the unemployed not claiming benefits (i.e. due to sanctions), whether JSA or UC. The latest figures from the Annual Population Survey show an ILO unemployment rate in GM for the 12 months up to September 2014 of 8.1% (107,000), a decrease of one percentage point (12,000) or 10.1% in the number of unemployed over the same period a year earlier. The rate is still markedly higher than the UK (6.6%) and the North West (7.5%) figures. Additionally, the economic activity rate – those either in work or looking for work (excluding people not able to work for health reasons, those in full time education etc.) in GM was recorded at 74.7% for the 12 months up to September 2014, 2.8 percentage points below the UK rate of 77.5%. New vacancies data will be available in the March edition of the Manchester Monitor.
Jobseeker’s Allowance - Annual Change
Total Jobseeker’s Allowance Claimants in November 2014
35,487
Decreased by 39.7% year-on-year
Women
Men
Long-term
$43.1% $45.6% $56.7% $43.9%
1 Loopstra, R et al. (2015): Do punitive approaches to unemployment benefit recipients increase welfare exit and employment? A cross-area analysis of UK sanctioning reforms. Sociology Working Paper Number 2015-01.
3 | Manchester Monitor – February 2015
Youth
Business Monitor UK and export orders for GM Firms Home orders for both manufacturing and service strong
40 30
Balance of firms
20 10 0 Export orders for both manufacturing and services weaker
-10 -20 -30 -40 -50 Q4-07
Q4-08
Manufacturing home orders
Q4-09
Q4-10
Manufacturing export orders
Q4-11
Q4-12
Q4-13
Service home orders
Q4-14
Service export orders
Services and manufacturing with strong growth in domestic orders The Q4 2014 GM Chamber of Commerce Quarterly Economic Survey (QES) gauges the opinion of more than 500 companies across GM. The latest results show record orders and sales in the service sector, the continuation of a highly positive trend. Some indicators however point to a possible skills shortage as recruitment difficulties are recorded at a five year high. The manufacturing sector exhibited the highest level of domestic orders in 10 years, while export orders were lower but did show positive growth. Services GM Chamber’s Q4 QES shows the balance of service sector companies reporting improving UK sales figures (the % of firms that reported an increase minus the % that reported a decrease), standing at +41%, the highest level recorded in the ten-year history of the QES, and exceeding prerecession average levels. The strength of the service sector’s UK order book is also good, with a balance of +31% for domestic orders. This too is at a record level for the QES, exceeding the previous highest record of the third quarter of 2004. For export orders the balance is +22%. Sounding a note of caution, there seem to be increasing issues around human resources as the balance for recruitment difficulties stands at +74%, the highest value since
Q4 2009 (and markedly higher than for the UK as a whole, where it stands at +62%), while service companies intentions to create full-time jobs stands at +86%, a 10-year high. Manufacturing Export orders for the GM manufacturing sector recorded a positive balance of +12% in Q4 2014, recovering from -1% in the previous quarter, but below the results for quarters Q3 2013 to Q2 2014. This tallies with the more subdued outlook of the UK’s single most important export market, the EU, as well as sluggish growth in China and other emerging markets. More positively, the weaker exports figure was offset by a more robust home market, whose balance was recorded at +36% - the highest value observed in the past 10 years. Manchester Monitor – February 2015 | 4
Place Monitor Hotel Occupancy peaks in 2014 Manchester Airport continues to grow its passenger numbers and attract accolades from industry. The latest hotel occupancy data confirmed that 2014 delivered the highest hotel occupancy levels to date. Airport Passenger Numbers
Hotel Occupancy
Manchester Airport handled around 1.39 million passengers in November 2014, 73,560 (5.6%) higher than 12 months previously. The annual growth was higher than experienced at Heathrow (1.1%), while Stansted (25.8%), Birmingham (10.0%) and Gatwick (5.8%) experienced higher year-onyear rises in passenger figures.
The average hotel occupancy rate in Manchester city centre was recorded at 75.6% in December 2014, a rise from 72.0% last year, and a record for the calendar month.
Passenger figures for November continued to support the annual growth for 2014 and figures for December are expected to reach the 22 million mark, a figure not achieved since 2007. In more good news, the Airport was awarded the title of ‘Best UK Airport’ at the Globe Travel Awards, just two months following the same accolade being awarded by the Airport Operators Association. The new Metrolink line that opened in November, serving the airport, increased the volume of passengers carried by Metrolink, which is now the largest light rail network in the UK. The airport train station is currently being developed to include an additional fourth platform that will increase the routes able to use the station and particularly those from the north of England. • An increased two daily frequency to King Hamad Airport Doha by Qatar Airways will become operational in February • Additionally, Etihad Airlines has also announced increased frequencies to Abu Dhabi to twice daily operations • Ryanair announced a new service six times a week to Stuttgart from April 2015
Hotel occupancy (city centre)
75.6%
Hotel occupancy (GM)
(3.6% pts)
(+2.4% pts)
73.4%
Weekend occupancy in the city centre reached 86.2%, a 0.9 percentage point increase on the December 2013 figure of 85.3%. The weekday average occupancy in the city centre was 70.9%, comparable with 68.0% for November 2013. For GM as a whole, average occupancy rates in December were 73.4%, a rise of 2.4 percentage points compared to 2013. Hotel occupancy in December was likely to be boosted by Manchester’s Christmas markets and key dates for hotel occupancy in the city centre during December were: • 13 December – occupancy of 99% was achieved when The Who performed at Manchester Arena and EventCity opened their Winter Wonderland Theme Park. • 02 December – 98% occupancy was recorded when Manchester United played at Old Trafford and Shrek The Musical opened at Manchester’s Palace Theatre. • 12 December – 98% occupancy was also recorded when Kasabian performed at Manchester Arena. The full year data for 2014 confirmed the highest annual occupancy level to date. The city centre reached an annual occupancy of 79% (from 77% in 2013) and GM reached 77% (from 76% in 2013).This shows the sector in a strong position at the start of a period of significant growth for new hotel openings, with over 780 new hotel rooms expected to become available in 2015.
Airport passenger numbers
1,388,998
Flights
(-23.4%)
11,337
% 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.
5 | Manchester Monitor – February 2015
(+5.6%)
Housing Monitor Average house prices 2007-14 £185,000
England & Wales
December 2014: £177,766
Average House Price
£175,000 £165,000 £155,000 £145,000
Greater Manchester
£135,000
December 2014: £107,986
North West
December 2014: £110,548
£125,000 £115,000 £105,000 £95,000
07 cDe
08 cDe
09 cDe
10 cDe
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GM housing market shows year-on-year growth The latest data from the Land Registry show that the average house in GM cost £107,986 in December 2014, an increase of 3.8% (£3,951) from this time last year, though lower than the growth seen in England & Wales of 7% (£7,063), to reach £177,766. House Prices Month-on-month, property prices in England & Wales grew 0.6% (£1,078) in December 2014, to reach £177,766. House prices in GM saw a month-on-month decline of 0.3% (£352) in December 2014 to £107,986. London remains the strongest performer in terms of house price change. The average house price in Greater London stands at £464,936, up by 16.3% (£65,300) over the same period last year. On a yearly basis, GM average house prices increased by 3.8% (£3,951). The Land Registry data show that house prices in the North West decreased month-on-month in December (by 1.6%, or £1,781), but increased on an annual basis (1.5%, £1,652). At a GM local authority level, all but one district saw house prices rise between December 2013 and December 2014: Salford (10.4%, £8,957), Trafford (8.8%, £16,065), Stockport (4.6%, £6,595), Bolton (2.8%, £2,442) Wigan, (2.8%, £2,524), Bury (2.6%, £2,870), Rochdale (2.4%, £2,089),
Manchester (1.6%, £1,529) and Oldham (1.1%, £881), while house prices in Tameside eased a little (down by 0.3%, or £283). Overall, the house price data are encouraging for GM, although price changes to remain unevenly spread across the conurbation. House sales Land Registry house sales data reveal that there were 3,234 properties sold in GM in October 2014, a yearly increase of 12.4% (356). This compared favourably to the picture in the North West (10.9%, 869) and nationally (3.6%, 2,782). Mortgage Approvals The Bank of England reports that the number of loan approvals for house purchase decreased by 3.8% between December and the six month moving average from 62,700 to 60,300, while the value increased from £9.6bn to £9.8bn.
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Crime Monitor Assault Attendances Across GM
15500 15000 14500 14000 13500 13000 12500
Oct-13
Jun-13
Aug-13
Apr-13
Feb-13
Dec-13
Oct-13
Aug-13
Jun13
Apr-13
Feb-13
Oct-12
Dec-12
Aug-12
Apr-12
Jun-12
Feb-12
Oct-11
Dec-11
Aug-11
Apr-11
Jun-11
Feb-11
Dec-10
Oct-10
Jun-10
Aug-10
Apr-10
Feb-10
Dec-09
12000
Record Assault Attendance Reductions The latest figures in relation to assault attendances at each of GM’s eight hospital trusts’ local emergency departments show a record reduction on the previous year, ensuring that figures remain at an historical low. Assaults Data Baseline data for the 12 months ending November 2014 show that 12,230 people were treated for assault-related injuries in GM hospitals, a decrease of 7.5% on the figures from the previous year. In actual terms, this is the second lowest rolling figure since records began five years ago, beaten only by last month’s figure. Key reductions at GM hospitals include Wythenshawe (18% reduction in the last six months), North Manchester (17%) and Salford (13%). Home addresses of assault attendees remain relatively static, with around 4% of attendees coming from outside GM, and 19% coming from Manchester Local Authority itself (although this figure is falling). Increases have been seen in the ratio of Oldham and Rochdale residents attending, however.
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With regards to age, the number of attendees in the 30-44 year age group continues to grow, and is now at a peak of 28.5% of all attendees. Conversely, the number of attendees in the 45-59 and 0-14 age groups is reducing. Crime Volumes Figures for the year ending December 2014 show that there were 194,359 reported crimes in GM. Victim-based crimes (stealing, criminal damage & arson, violence and sexual offences) saw 175,213 cases recorded over the same period. GM Fire & Rescue Service Data The number of deliberate primary fires (those where owned property is involved) featured around 1,400 primary fires to the end of December 2014.
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