Manchester Monitor November 2014 Growth in commercial property market
Unemployment continuing to fall Commercial property demand increasing Rise in business incorporations Visitor economy performing well Increase in violent crime
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Monitor Focus Growth in commercial property market The latest CBRE Market Review shows that take-up of office space in Greater Manchester (GM) is increasing. Total office floor space let in the first six months of 2014 was 786,000 sq. ft., a rise of 66% on H2 2013, and 80% above its longterm half-year average. The average rent for prime office space was £30.00 per sq. ft. in H1 2014, remaining steady compared to H2 2013. CBRE is expecting an increase in rents to £32-£32.50 per sq. ft. by the end of 2014 due to increasing demand, with average rents for prime offices in Manchester amongst some of the highest outside London. There is currently 2.41million sq. ft. of available office space in GM, down by 20% from 2012. Manchester Airport continues to perform strongly, and the latest data from the Civil Aviation Authority show that in August 2014, it handled nearly 2.6 million passengers, 148,100 (8%) higher than 12 months previously. Month-onmonth passenger numbers increased too, from over 2.4 million in July 2014, a rise of 6.1% (162,700). The wider visitor economy is performing well too, with hotel occupancy rates recorded at 84.4% for GM and 85.2% for Manchester city centre for September 2014. The conurbation experienced a 5.1% point increase in occupancy on an annual basis, while hotel occupancy in Manchester city centre was 5.4% points higher than in September 2013. The positive outlook continues across the wider economy. The Office for National Statistics (ONS) reports that the third quarter of 2014 was the seventh successive quarter of growth in the UK in terms of GDP. This makes the UK economy 3.0% larger than in the same period a year ago, even though growth has eased back slightly from the 3.2% in Q2. The manufacturing sector increased its quarter-onquarter growth to 0.5%, rising faster than in the previous quarter (0.2%). At a GM level, the latest unemployment figures from the Department for Work and Pensions (DWP) show further reductions in the number of people claiming Jobseeker’s Allowance (JSA), continuing a strong positive trend. Current JSA data show that around 44,600 people – or 2.5% of the working age population – were claiming Jobseeker’s Allowance in Greater Manchester (GM) in September 2014. This represents a decrease of 2,300 (4.8%) when compared with the figure for August 2014. The North West (2.4%) and Great Britain (2.2%) also saw monthly decreases.
1 | Manchester Monitor – November 2014
It should also be noted that the introduction of Universal Credit (UC) continues to affect JSA data, with over 7,000 people in GM claiming UC as of September 2014. UC folds six different benefits and credits into one payment, covering both in-work and out-of-work people. Adding a reasonable share of 95% of the UC claimants (those assumed to be unemployed) to the JSA claimant count would indicate a combined JSA/UC claimant count of just over 51,000. On an annual basis, combined JSA/UC claimant count decreased by 30.5%. While this is less than the 38.5% decline for JSA claimants, it still represents a substantial fall over the last year and highlights ongoing improvements in GM’s labour market. On the business front, Bureau van Dijk’s FAME company database shows that GM is experiencing a healthy increase in the number of new business incorporations. The number of firms registering at Companies House increased by 23.9% in GM from September last year, which is a larger increase than the average recorded across England. The latest data from the Land Registry show that the average house in GM cost £108,000 in September 2014, an increase of 5.8% (£5,900) from this time last year, slightly below the annual rise of 7.2% (£11,900) in house prices for England & Wales. The average house price in the North West in September was £113,400, down 0.5% (£518) from last year. In terms of properties sold, house sales in GM grew by 12.4% (339) between July 2013 and 2014. This is proportionally more than in the North West and nationally, where house sales have risen 10.7% and 7.4% respectively on an annual basis. The most recent figures from the GM Police show an increase of 6.1% (11,000) in the number of reported crimes in the year ending September 2014, to 189,400 reported offences. Key to this rise has been the continued increase in violent crimes (homicides, and violence both with and without injury) which have undergone a 27.2% (7,522) increase in the period. The latest figures from GM Fire & Rescue record a 28.8% reduction in the total volume of deliberate fires in GM. This was reflected both in primary and secondary fires. Deliberate secondary fires (smaller fires affecting open spaces and the public realm) reduced by 32.2% for the 12 months to September 2014. Deliberate primary fires, which affect owned property, fell by 11.7% annually.
Monitor Dashboard Jobseeker’s Allowance (JSA) claimants
Airport Passengers
38.5%
8.0%
since last year
Number of new businesses incorporated
since August 2013
Hotel Occupancy
5.1%pts
23.9%
since September 2013
in GM since August 2013
House Prices
Crime
5.8%
since September 2013
6.1%
since September 2013
Manchester Monitor – November 2014 | 2
People Monitor Unemployment continues to fall The latest figures show that around 44,600 people were claiming Jobseeker’s Allowance (JSA) in Greater Manchester (GM) in September 2014 – a decrease of 2,300 (4.8%) when compared with the figure for August 2014 of 46,900. In annual terms the number of JSA claimants in GM is 27,900 (38.5%) lower than in September 2013. JSA numbers are increasingly being affected by the introduction of Universal Credit (UC) and are likely to be phased out in the future, and this month’s Monitor provides further information on the changes. JSA Claimants
ILO Unemployment
Around 2.5% of the resident working age population in GM were claiming JSA in September. This rate remains slightly higher than in the North West (2.4%) and Great Britain (2.2%). There were 20,700 long-term JSA claimants (6 months+) in GM in September 2014, representing an annual decline of 40.4% (14,400). This was above the regional (37.2%) and national falls (34.9%). Youth unemployment (JSA claimants aged 16-24) in GM fell on a monthly basis between August and September, decreasing by approximately 360 (3.4%) to 10,200. Universal Credit Data sourced from the Department for Work and Pensions (DWP) show that there were 7,050 people claiming UC in September 2014. These people are not included in JSA claimant count statistics, meaning that the unemployment outlook based purely on trends in JSA claimants may look more flattering than it actually is. It is reasonable to assume that a high proportion of UC claimants – as many as 95% – would otherwise be claiming JSA in the absence of UC. This would add 6,700 people to the JSA figure for GM, giving a combined JSA/UC total of just over 51,000. On an annual basis, combined JSA/UC claimants fell by 30.5%. This is less than the 38.5% decline for JSA claimants, however it still represents a substantial fall over 12 months and highlights ongoing improvements in the labour market.
Total Jobseeker’s Allowance Claimants in September 2014
An alternative way of analysing trends in unemployment is to use the International Labour Organisation (ILO) measure. It records the rate of people, who currently do not have a job but want one, 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, whether JSA or UC. The latest figures from the Annual Population Survey show an ILO unemployment rate for people aged 16-64 in GM at 8.8% for the 12 months to June 2014, compared to 8.1% for the NW and 7.0% for the UK. While the conurbation’s figure is higher than the regional and national averages, it represents a substantial improvement on two years previously when unemployment in GM was in double digits. Vacancies Data1 There were nearly 21,900 vacancies in GM in September 2014. Just over two-thirds of GM based-vacancies were situated in Manchester (67.3% or 14,700), followed by Stockport (7% or 1,500) and Bolton (4.9% or 1,700). The highest proportion of vacancies (32.0%) in September 2014 was in professional occupations – 7,000 jobs. Associate professional & technical roles (18.9%, or 4,100) was the second largest occupation group, followed by administrative and secretarial occupations (9.5%, or 2,100). Only 5.1% were in elementary occupations. Skills cluster analysis reveals that the top three most sought after specific skills by GM employers for September 2014 were programming, development & engineering; web design & technologies; and accounting, bookkeeping & tax preparation.
Jobseeker’s Allowance - Annual Change
44,632
Decreased by 38.5% year-on-year
Women
Men
Youth
Long-term
$35.2% $40.2% $46.8% $40.4% Source: Labour/Insight (Burning Glass Technologies)
1
3 | Manchester Monitor – November 2014
Business Monitor Office Take-up in GM by Sector, January-June 2014 Public Sector 3%
Banking & Finance 19%
Professional Services 35%
Business Services 10%
TMT 11% Consumer Services & Leisure 15%
Manufacturing, Industrial & Energy 1% Insurance 6%
Commercial property market performing well Figures from the latest CBRE Market Review show that take-up of office space in Manchester is on the rise. Total office floorspace let in the first six months of 2014 was 786,000 sq. ft., up by 66% on H2 2013, and 80% above its long-term half-year average. Commercial property market
New business incorporations
The CBRE analysis highlights the importance of financial, professional & business services (FPS) to GM, with FPS accounting for more than 500,000 sq. ft. of all office space let in H1 2014.
Figures from the Bureau van Dijk FAME business database show that the number of new business incorporations (firms registering at Companies House) is on the rise. The number of new incorporations – 2,208 – increased by 23.9% (or 426) in GM from September 2013 to September 2014, a larger rise than the average recorded across England. This shows GM is performing well in terms of business start-ups – ahead of England where the number of new incorporations increased by 17.5% (6,677). The number of start-ups has increased rapidly in the North West with 27.1% more new businesses incorporated than in September 2013.
The average rent for prime office space in Manchester was £30.00 per sq. ft. in H1 2014, remaining steady compared to H2 2013. CBRE is expecting an increase in rents to £32£32.50 per sq. ft. by the end of 2014 due to increasing demand. Manchester has some of the highest prime rents per sq. ft. for office space outside London, higher than Birmingham (£28.50), Bristol (£27.50), Leeds (£25.50) and Edinburgh (£28.50). There is currently 2.41m sq. ft. of available office space in GM, down by 20% from 2012. While no major completions are expected for 2015, there are eight other schemes – all located in Manchester City Centre (three at St Peter’s Square) – expected to be ready by 2016/17.
Five localities recorded a higher increase in new businesses incorporated than the GM average of 23.9%. Bury saw the highest increase of 55% (or 61), followed by Salford (39%, or 60), Trafford (34.5% or 78), Bolton (33.8% or 54) and Tameside (26.5%, or 22). The growth rate for Manchester was below the GM average at 17.5%, while Wigan (12.4%, or 14), Rochdale (12.4%, or 13), Oldham (12.2%, or 12), Stockport (5.3%, or 10) were also below the GM average.
Manchester Monitor – November 2014 | 4
Place Monitor Record airport passenger numbers and new international routes The latest monthly airport data from the Civil Aviation Authority show that Manchester Airport passenger numbers are increasing, and if current trends continue 2014 may be its busiest ever year. More good news comes in the shape of hotel occupancy figures, which show strong occupancy levels for both weekends and weekdays for the month of September. Airport Passenger Numbers
Hotel Occupancy
Manchester Airport handled more than 2.6 million passengers in August 2014, 148,100 (8.0%) more than in the previous 12 months. This represents the largest monthly passenger number at Manchester Airport in the past six years. Month-on-month passenger numbers also grew, up from 2.41 million in July, a rise of 6.1% (162,700). The summer months are traditionally the busiest as the holiday season kicks in. Flights numbers are up 3.4% on the same period as last year.
The average hotel occupancy rate in Manchester city centre was recorded at 85.2% in September 2014, up 5.4 percentage points from the same month last year. Weekend occupancy in the city centre averaged 89.6% during the month, a 5.4 percentage point increase on the September 2013 figure of 84.2%. The weekday average occupancy in the city centre was 84.3%, up from 78.8% on the same month last year.
The annual growth in passenger numbers at Manchester Airport was higher than that experienced by Heathrow (1.3%), and Birmingham (5.2%) while Gatwick (8.2%) and Stansted (10.3%) experienced slightly higher year-on-year growth. Looking ahead, September figures are expected to confirm further growth in passenger numbers. This follows the launch of a new £500,000 investment by airport owner MAG to extend its successful ‘Fly Manchester’ marketing campaign, targeting the 4 million passengers from its catchment area that travel to other airports when they could access the same routes direct from Manchester. In further good news, Delta Air Lines announced that it will launch a daily service to Manchester from New York John F Kennedy Airport (JFK) and Condor will start operating two routes with weekly flights to Irakleion (Greece) and Bourgas (Bulgaria), which should further boost passenger numbers looking forward.
Hotel occupancy (city centre)
85.2%
Hotel occupancy (GM)
(+5.4% pts)
(+5.1% pts)
84.4%
For GM as a whole, average occupancy rates in September were 84.4%, a rise of 5.1 percentage points compared to the September 2013 figure. Key dates for hotel occupancy in the city centre during September were: • 9 September – occupancy of 98% was achieved, which coincided with the Manchester Arena hosting a Pharrell Williams concert and this was also the week when Manchester Central hosted the Soccerex Global Convention. • 22 September – 98% occupancy was recorded, which coincided with the Labour Party holding its annual conference at Manchester Central. • 27 September – 99% occupancy was achieved for the first time in 2014 when Manchester United hosted West Ham United in the Premier League and the National Cycling Centre hosted the Senior Track Championships. Salford also hosted the Salford Music Festival over this date and Trafford hosted a number of exhibitions and an event at EventCity.
Airport passenger numbers
2,561,523
Flights
(3.4%)
16,716
% 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 – November 2014
(+8%)
Housing Monitor Average House Prices, 2007-14 £185,000
England & Wales September 2014: £177,299
£175,000
Average House Price
£165,000 £155,000 £145,000 £135,000
North West September 2014: £113,389
£125,000
Greater Manchester September 2014: £108,002
£115,000 £105,000 £95,000 pSe
07
Se
08 p-
09 pSe
10 pSe
pSe
11
12 pSe
13 pSe
14 pSe
House prices rise on annual basis Land Registry data show that the average house in GM cost £108,002 in September 2014, an increase of 5.8% (£5,878) compared with the corresponding month in 2013. The rise still remains below the annual increase of 7.2% (£11,914) in England & Wales, with properties now costing an average of £177,299 on a national basis. House Prices On a monthly basis, property prices in GM increased slightly by 0.3% between August and September, while the North West saw a decline of 0.5% and in England & Wales prices fell by 0.2%. While house prices in England & Wales have recovered to a level of only 2.2% below their all-time high in November 2007, GM’s average property is 16.3% below its peak value in April 2008 of £129,000.
All districts in GM saw annual rises in house prices between September 2014 and the same period a year earlier. The largest year-on-year percentage increases were observed for Bury (11.3%, £11,800), followed by Stockport (8%, £11,300), and Rochdale (6%, £5,100). Bolton (1.2%, £1,000) and Tameside (4%, £3,552) saw the lowest increase in housing prices.
In GM, there are clear differences in average costs when data are analysed at a local authority level in the conurbation. Trafford remains the most expensive part of GM, with a typical property in the borough costing more than £194,000 in September 2014. This is followed by Stockport (£152,000) and Bury (£116,000), and all three districts are above the GM average property costs (£108,000). The other seven districts are below this, with Oldham currently having the lowest property price at just under £81,000.
House sales House sales data from the Land Registry show that there were a total of 3,071 properties sold in GM in July 2014, an increase of 339 units (12.4%) over the same period a year earlier. This was above the North West annual rate of growth for house sales of 10.7%, as well as the England & Wales figure of 7.4%. While the Land Registry data indicate that sales are still increasing, more recent figures from the Bank of England (BoE) show that mortgage approvals in September fell to their lowest level since July 2013. BoE’s tighter lending criterea seems to have been at least partly responsible for this.
Manchester Monitor – November 2014 | 6
Crime Monitor Victim Based Crime in GM September 2013 - September 2014 40,000
+27% 35,143
35,000 30,000
-0% 28,193
27,621
28,182
25,000 Sep-13 20,000
Sep-14
15,000 10,000
+28%
5,000 0
3,028
Violence
3,876
Sexual Offences
Criminal Damage & Arson
Increase in victim-based crime Comparing data provided by GM Police (GMP) for the 12 months ending September 2014 with the same period in the previous year shows that the number of reported crimes in GM has increased by 6.1%. Fire & Rescue Service data show a decline in both primary and deliberate fires for the year ending September 2014. Crime Volumes
GM Fire & Rescue Service Data
Figures for the year ending September 2014 show that there were just over 189,400 reported crimes in GM – an annual increase of 6.1%, or 11,000 additional offences.
The total volume of deliberate fires has reduced by 28.8% across GM. Deliberate secondary fires in GM (i.e. smaller fires affecting open spaces and the public realm rather than property) were recorded at less than 5,500 for the 12 months to September 2014, compared to more than 8,000 for the previous year and equating to an annual decrease of 32.2% (2,600).
Victim-based crimes (stealing, criminal damage & arson, violence and sexual offences) saw 170,730 cases recorded over the same period, representing an annual increase of 6.4% (10,200). Key to this rise has been the continued increase in violent crimes (homicides, and violence both with and without injury) which saw a 27.2% (7,522) increase in the period. A similar increase has been seen across the country.
7 | Manchester Monitor – November 2014
The number of deliberate primary fires (where owned property is involved) also fell by 11.7% annually, with fewer than 1,500 primary fires recorded in the 12 months to September 2014 compared to over 1,600 in the same period last year. The reductions continue the positive trend linked to increased interventions activity such as youth engagement and school visits.
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