Manchester Monitor June 2014
Greater Manchester is open for business
Jobseeker numbers continue to fall New business incorporations on the increase Record weekday for hotel occupancy House prices continue to rise www.neweconomymanchester.com research@neweconomymanchester.com
Monitor Focus Greater Manchester is open for business Greater Manchester (GM) is performing strongly, particularly in terms of business activity – reflecting the national economic climate. The UK economy continues to perform well and the Office for National Statistics (ONS) has confirmed GDP growth at 0.8% in Q1 2014. This means the economy grew at 3.1% on an annual basis. The increase makes the UK one of the fastest growing western economies, although it is important to note that the economy is still 0.6% smaller than its peak in early 2008. Many analysts now expect this milestone to have been passed when the ONS publishes its estimate of second quarter GDP in July. Analysis of results from the Bureau van Dijk FAME business database show that the number of new businesses incorporated (firms registering at Companies House) increased by 22.9% (442) in Greater Manchester (GM) from April 2013 to April 2014. This is a major improvement from the 2013 levels and shows GM is outperforming the North West (+15.3%, or 712) as well as England (+18.5%, or 7,726) in terms of new business incorporations. The largest increase in new incorporations was reported in Salford (37.1%), followed by Tameside (33.0%) and Bolton (32.9%). In further good news on the business front, MIDAS, Manchester’s inward investment company has reported that 2013/14 was a record year as it supported the creation of more than 4,000 jobs across 75 projects in GM during the past year. Overall, MIDAS reported that the economic impact of its support in creating, safeguarding or relocating jobs was £285.8 million. More than half (52%) of these actions were the result of foreign direct investment. This positive outlook is reflected in the commercial property market in GM, where industrial property rents have increased by 4.5% from the previous year now standing at £5.75 per square foot. Prime rents for office floor space have remained at £30.00 per square foot, however, analysis from Cushman & Wakefield emphasises the strong demand for Grade A office premises which is improving the occupational performance of the UK office market. The positive trend continues in the labour market as the number of people claiming Jobseeker’s Allowance (JSA) in GM fell by 4.5% in April when compared with March 2014. This means that there were just over 58,700 people claiming JSA in GM in April. The strong decline in the number of
1 | Manchester Monitor – June 2014
claimants continues as there were 30.1% fewer claimants in GM in April than there was 12 months ago. The need for more robust data should be noted though, as the current JSA figures do not take into consideration the impact Universal Credit is having on the trial areas in GM. The level of youth unemployment has decreased even more substantially as there were 38.2% fewer young JSA claimants in GM compared to this time last year. The increasing house prices also tell a positive story in GM. Data from the Land Registry show that the average house in GM cost £105,400 in April, which is a 4.1% (£4,145) increase from this time last year. This exceeds the rate of price increases in the North West (3.8%). While the number of house sales has risen 38.8% (708) in GM year-on-year, exceeding the increase in England and Wales (37.9%), house prices are still rising at a slower pace than the national 6.7%. In terms of the GM visitor economy, weekday hotel occupancy helped boost the overall rates in April. The weekday occupancy rate was the highest since 2008 and reached 74%, compared to the average of 71% for the previous ten years. January-April 2014 occupancy levels in the city centre mirror those of 2013, while the figures are slightly higher across GM. The 74% occupancy rate recorded in GM for April was only one percentage point lower in the previous year. Passenger numbers at Manchester Airport fell slightly, reflecting the late timing of Easter holidays. The Airport handled 17.0% more passengers in March 2014 than in February – despite the 1.2% year-on-year decrease. The impact of this slight fall in passenger numbers is not expected to dent the Airport’s aim of reaching 21 million passengers a year. Additional routes should boost numbers over the next few months, which includes a new long haul route from American Airlines to Charlotte in North Carolina. It is estimated that this will bring a further 200 passengers to Manchester Airport every day until the end of September. Thomas Cook has also launched a new route to Miami, which is the only direct flight to Miami outside London. Other new destinations include for example Antalya in Turkey, Kefalonia in Greece, Malta, Alghero in Italy and Djerba in Tunisia, which will be available in Summer 2015.
Monitor Dashboard Jobseeker’s Allowance (JSA) claimants
Airport Passengers
30.1%
1.2%
since last year
since March 2013
Number of new businesses incorporated
22.9% in GM since April 2013
Hotel Occupancy
0.5%pts average occupancy rate in GM was 74.2%, down from 74.7% on the previous 12 months
House Prices
4.1% since April 2013
Manchester Monitor – June 2014 | 2
People Monitor Labour market conditions continue to improve The latest figures show that around 58,700 people were claiming Jobseeker’s Allowance (JSA) in GM in April 2014 – a decrease of 2,740 (4.5%) when compared with the figure of 61,410 for March. Overall, the number of JSA claimants in GM is 25,300 lower (30.1%) than 12 months ago. Average wages continue to increase on year-on-year terms. JSA Claimants Around 3.3% of the resident working age population in Greater Manchester were claiming JSA in April. This rate is higher than in the North West (3.1%) and Great Britain (2.7%), mirroring the longer term trend of the conurbation having a higher JSA claimant rate than the region and also nationally. JSA data, however, is exposed to the distorting effect of the areas trialling Universal Credit in GM.
This is higher than the 351,000 increase in full-time and parttime employees in the private and public sectors. Studies show that pay levels among the self-employed are around 40% lower than for employed people keeping average pay rates low.
The number of male JSA claimants in GM fell on a monthly basis by 4.8% (1,800) to 38,150, while the number of female claimants decreased 3.9% (800) to 21,300. This is in line with the annual JSA figures for males and females, which are also falling. The year-on-year fall in GM for male claimants was 12,300 (32.3%) and 5,300 (25.7%) for female claimants.
With labour market conditions improving, salaries have also been on the increase. Average pay including bonuses in Great Britain was 1.7% higher than a year earlier in the first quarter of 2014 according to ONS, although the Consumer Price Index (CPI) rose to 1.8% in the year to April 2014, so inflation is once again higher than wage rises. ONS reports transport cost increases were the largest factors contributing to this rise.
Youth unemployment (JSA claimants aged 16-24) in Greater Manchester has also decreased 7.0% on a monthly basis, falling from 14,700 to 13,700. On an annual basis, the number of youth JSA claimants is now 38.2% (5,300) lower than this time last year.
Vacancies Data There were 11,580 vacancies in GM in April 2014. Nearly two-thirds of GM based vacancies in April were situated in Manchester (67.2% or 7,780), followed by Stockport (7.3% or 850) and Bolton (5.4% or 621).
There was also a decline in long-term (6 months+) claimants in GM in April 2014 to 27,000, down by 2.7% (730) on a monthly basis. On an annual basis the number of long-term claimants has fallen by 30.0% (8,100), which is a marginally larger decrease than in the North West (-29.3%) but well ahead of the average of 27.8% in Great Britain.
The highest proportion of vacancies (35.1%) in April 2014 was in professional occupations – 4,070 jobs. Associate professional & technical roles (22.3%, or 2,580) was the second largest occupation group followed by sales & customer service occupations (9.3%, or 1,078).
Employment has increased at the fastest pace in 43 years now reaching 30.4 million. The number of self-employed people in the UK has risen by 375,000 since March 2013 to nearly 4.6 million according to the latest data from the ONS.
Skills cluster analysis reveals that the top three most sought after specific skills by GM employers for April were programming, development & engineering; databases & data warehousing; and accounting, bookkeeping & tax preparation.
Jobseeker’s Allowance - Annual Change
Total Jobseeker’s Allowance Claimants in April 2014
58,667 Decreased by 30.1% year-on-year
Vacancies - Annual Change Women
Men
Youth
$25.7% $32.3% $38.2% $30.0%
$31.1% 1
Source: Labour/insight (Burning Glass Technologies)
3 | Manchester Monitor – June 2014
Long-term
Business Monitor % change in the number of new businesses incorporated, April 2013-14 40%
+37% (270) +33% (140)
35%
+33% (210)
England (+19%, 50,470) 30% +24% (260)
25%
+23% (730)
+22% (180)
+20% (240)
20% 15% +9% (110)
10%
+8% 110
+6% (130)
5% 0%
Sa lf o
rd
Ta me sid
Bo e
lt o n
Sto ckp
ort
Bu Ma ry nc he ste r
Tra ffo
Ro rd
ch da le
Old ha m
Wi ga
n
Business start-ups on the rise Analysis of results from the Bureau van Dijk FAME business database show that GM is performing well in terms of the number of new business incorporations (firms registering at Companies House). The number of new incorporations increased by 22.9% in GM from April 2013 to April 2014 – a larger increase than what was recorded in both the North West and England. The rise in prime rents in the first quarter of 2014 reflects the occupational demand particularly for office space. New business incorporations There were 2,375 new businesses incorporated in GM in April 2014, 22.9% (442) more than in April of 2013. This shows GM is performing well in terms of business start-ups – ahead of North West where the number of new incorporations increased by 15.3% (712) and ahead of England’s 18.5% (7,726) increase. In total, four localities reported increases above the GM average in the number of new business incorporations: Salford (+37.1%, or 72); Tameside (+33.0%, or 34); Bolton (+32.9%, or 51); and Stockport (+24.3%, or 50). Manchester reached the average increase of 22.9% (137) while Bury (+21.9%, or 33); and Trafford (+20.0%, or 40) reported slightly lower increases. Overall, the number of new business incorporations increased in all localities, with smaller increases in Rochdale (+9.3%, or 9); Oldham (+7.6%, or 8); and Wigan (+6.4%, or 8). Commercial property market Cushman & Wakefield’s latest market reports show that prime rents for both office and industrial properties have increased year-on-year in Manchester. This reflects the increase in the number of business incorporations and the increased demand for properties to carry out business in.
The average office rent per sq. ft was £30.00 in Manchester in March 2014, exceeding rates in Birmingham (£27.50), Bristol (£28.00), Leeds (£24.50) and Edinburgh (£29.00). Industrial property rents for March 2014 stood at £5.75 per sq. ft, a 4.5% increase from the previous year. Industrial property rates in Manchester are competitive and remain below Bristol (£7.75) and Edinburgh (£7.25) and at the same level with Birmingham (£5.75). Cushman & Wakefield expects prime rents in the industrial property market to stay relatively stable nationwide, however a supply shortage is expected to remain an issue. Overall, high demand particularly for modern logistics premises is expected to increase. Strong competition for Grade A office premises is improving the occupational performance of the UK office market. Demand for regional offices is improving against the interest in properties in key regional central business districts. The limited availability of quality office supply may have an impact on occupational demand according to Cushman & Wakefield.
Manchester Monitor – June 2014 | 4
Place Monitor Hotel occupancy boosted by weekday visitors Latest figures show that while April was not as busy a month as March in terms of airport passenger numbers and hotel occupancy, the visitor economy is performing steadily. April saw the busiest weekday for hotel occupancy since 2008, which shows it is not only weekends that bring visitors to GM. Hotel Occupancy Hotel occupancy rates for April 2014 in Manchester city centre fell from the record figures recorded in March 2014. The occupancy rate stood at 76.0% which is a decrease of 4.5 percentage points from the previous month, but still higher than the figure twelve months previously (75.4%). The April rate was also above the 74% average from 2000-2013. Occupancy rates across GM fell 3.5 percentage points from the previous month to 74.2%. The GM rate fell only slightly behind the 2013 figure of 74.7%. While the average weekend occupancy rate in the city centre was down one percentage point from the April 2014 figure of 84%, weekdays were one percentage point higher in April 2014. The overall boost to average rates is mainly due to the higher than average weekday occupancy. Key dates for hotel occupancy in the city centre during March were: • 01 April – 95% occupancy was achieved on this weekday, boosted by Manchester United playing Bayern Munich in the UEFA Champions League at Old Trafford. The British Association of Public Safety Communication Officials also held their conference at Manchester Central. • 05 April – occupancy of 95% was recorded for the first Saturday of April as a range of events took place in GM: the Cake & Bake Show at Manchester Central, the British University Fair at Manchester Central and Manchester City hosting Southampton at the Etihad Stadium. Other major events included the Backstreet Boys’ performance at the Phones 4u Arena and the ASICS Greater Manchester Marathon which took place the following Sunday.
Airport Passenger Numbers Manchester Airport handled over 1.4 million passengers in March 2014 according the data from the Civil Aviation Authority. This represents an increase of 17.0% (208,300) on the previous month. In annual terms passenger numbers decreased by 1.2% (-17,300), which reflects the 3.0% fall in the number of passenger flights. The lateness of the Easter holiday period may be one contributing factor to this decrease. Heathrow saw an annual fall of 2.8% in passenger numbers in March 2014, with increases recorded at both Gatwick Airport (5.1%) and Birmingham (4.6%). Despite the small annual decrease in passenger numbers, Manchester Airport remains on course to reach its aim of 21 million passengers a year. American Airlines has launched a new route to Charlotte in North Carolina, which will operate every day until the end of September. This new flight connection is estimated to bring around 200 more passengers to the Airport on a daily basis. Other long haul destinations include Thomas Cook’s new route to Miami, which makes Manchester the only airport outside London to fly non-stop to Miami. In addition to their Miami flight, Thomas Cook will launch a flight to New York. These routes are estimated to bring a total 60,000 passengers more to Manchester Airport. The budget airline Jet2.com has also launched three new destinations – Antalya in Turkey; the Greek island of Kefalonia and Malta – which are planned for summer 2015. Thomson announced four new routes for Summer 2015: Alghero in Italy; Djerba in Tunisia; Split in Croatia; and La Palma in the Canary Islands.
• 26 April – 94% occupancy rate was achieved as Manchester United hosted Norwich City at Old Trafford; MS Life 2014 event took place at Manchester Central; The Manchester Golf Show was held at EventCity; and the Senior Final Fours Basketball Finals took place at the Amaechi Basketball Centre. Hotel occupancy (city centre)
(+0.6% pts)
Airport passenger numbers
(-1.2%)
76.0%
1,432,951
Hotel occupancy (GM)
Flights
(-0.5% pts)
74.2%
(-3.0%)
11,430 % 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 – June 2014
Housing Monitor GM Housing Market
Average House Price
April 2014: £105,399
3,500
£105,000
3,000
£104,000
2,500
£103,000
2,000
HOUSE SALES £102,000
February 2014: 2,515 1,500
£101,000
1,000
£100,000
500
£99,000 Apr
House Sales
HOUSE PRICES
£106,000
0 -12 un-12 ug-12 ct-12 ec-12 eb-13 pr-13 un-13 ug-13 ct-13 ec-13 eb-14 pr-14 A A O O J J F F A D D A
House prices continue to rise Land Registry data show that the average house in GM cost £105,400 in April 2014, an increase of 4.1% (£4,145) from this time last year. This rise still remains below the increase in prices in England & Wales as a whole: 6.7% (£10,809), reaching £172,069. House Prices Property prices in GM have continued growing with a 0.6% (£617) month-on-month increase in April 2014. The average house price in GM now stands at £105,400 – up 4.1% (£4,145) from this time last year. Prices in England and Wales have increased by 6.7% on annual terms to £172,069. This is a 1.5% (£2,599) monthly increase ahead of GM. House prices in the North West are growing at a slower pace recording a 3.8% (£4,128) year-on-year increase. While this is also below the annual increase of prices in GM, the monthly increase across North West is 3.0% (£3,289), which shows that housing market growth in the wider region is also gathering pace. Looking at individual local authorities in GM shows that house prices grew in annual terms in all districts except Tameside and Manchester. Prices in Tameside fell by 3.7% (£3,450) while they remained at the same level as in April 2013 at £94,050. The largest increase was recorded in Oldham where prices rose 12.1% (£8,958) in annual terms. This was followed by Bolton (8.5% or £7,300); Bury (7.5% or £7,700); Stockport (7.2% or £10,000); Salford (6.8% or £5,800); Trafford (2.8% or £5,000); Wigan (2.8% or £2,459); and Rochdale (1.9% or £1,600).
While house prices are increasing in nearly all of the local authorities, the cost of properties varies still considerably across the conurbation. The average house price in Oldham costs £82,800 compared to £185,000 in Trafford. House sales House sales data from the Land Registry shows that there were a total of 2,515 properties sold in GM in February 2014, a monthly increase of 4.5% (108). This shows the housing market in GM is gathering pace compared to the wider region, where the number of sales decreased by 2.7% (183). The regional figures reflect the national level of sales which decreased by 3.0% (1,903) in monthly terms. While January and February are traditionally a quieter time for the housing market, the number of sales often creeps up during Spring. Looking at year-on-year figures shows that overall, house sales in GM have increased by 38.8% (703) between February 2013 and 2014. This is slightly higher than the increase in England and Wales (37.9% or 17,130) but more than five percentage points ahead of the North West, where sales increased by 33.5% (or 1,668).
Manchester Monitor – June 2014 | 6
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