Forecast For Value Of North West’s Economy In 2016 Falls By £700m

The dominance of Greater Manchester’s economy within the Northern Powerhouse region has been highlighted in a new report which says it grew faster than Inner London at the end of 2015. 

Irwin Mitchell’s latest UK Powerhouse report, which has been produced with the Centre for Economic and Business Research (Cebr), provides an estimate of GVA¹ and job creation within 38 of the UK’s largest cities 12 months ahead of the Government’s official figures.

The latest study reveals that Greater Manchester’s economy grew by 2pc in the 12 months to Q4 in 2015 compared to 2.5pc in the 12 months to Q3 in 2015.

Inner London’s economy expanded by 1.9pc in the year to Q4 compared to Q3 when the increase in the total value of the goods and services produced had gone up by 2.6pc.

The report found that Greater Manchester’s economy was valued at £57bn at the end of 2015 and that 1,263,323 people were employed. This employment figure represented a year-on-year increase of 2.8pc. This was above Newcastle (2.2pc), Leeds (2pc) and Sheffield (-0.4pc) but below Liverpool (4.4pc) and Birmingham (4.6pc).

In line with its projections for the UK as a whole, Cebr has lowered its forecasts for GVA in 2016 for the North West. Three months ago, GVA in the region was expected to reach £149.6bn by the end of this year, but this has been revised downwards by more than £700m to £148.9bn.

Looking further ahead, the report’s projections for the next 10 years still shows that London will continue to grow at a much faster rate than other parts of the UK.

Irwin Mitchell’s report predicts that by the end of 2025², London's economy will have grown by 26pc since 2015. Over the next 10 years, Greater Manchester's GVA is however predicted to increase by 17.7pc with other large cities in the North expected to record similar increases with Leeds and Liverpool growing by 17.1pc and 17.3pc respectively, Sheffield 15.1pc and Newcastle recording a 16.4pc increase.

The value of the economic gap between London and the northern region currently stands at £62bn and is expected to reach £115bn in 2025 according to the study’s latest analysis.

The report’s findings follow a series of announcements at the Budget last month which included a £300m pledge by the Chancellor to improve journey times between the northern region’s largest cities.

Roy Beckett, Head of Business Legal Services at Irwin Mitchell in Manchester said:

Expert Opinion

“The last quarter of 2015 was a tough one for Greater Manchester, but the city showed great resilience in the face of some tough headwinds.

“There is clearly still much to be done to tackle the North-South divide and it’s vital that the announcements relating to infrastructure which were made at the Budget last month are supported by a broad range of other policies including the devolution of more powers, greater involvement of businesses in education policy and the creation of more enterprise hubs around universities.”
Roy Beckett - Partner

Irwin Mitchell produced its first UK Powerhouse report in October 2015. The report predicted a growing economic gap between the South East and the North of England and made nine policy recommendations along with a call for the Government to radically rethink how it looks to rebalance the UK’s economy.

The Powerhouse Tracker reports are a quarterly follow-on and provide a ‘nowcast’ of GVA and employment for a range of key cities across the UK. In the most recent analysis, Milton Keynes was the fastest growing city in the final quarter of 2015 and will remain to be so in 2016.

For further information and to download the latest version of the report, click here

To take part in Irwin Mitchell’s UK Powerhouse quiz, click here