Liverpool Expected To Outperform Manchester
A new economic study has revealed that North West cities will all be showing rapid recovery rates at the same time as the government’s extended furlough scheme comes to an end next year.
The latest UK Powerhouse report by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr), says that the average annual GVA growth in the second quarter of 2021 across all locations is expected to be 23%.
The report however reveals Manchester and Stockport fall below this level with 21% year-on-year growth. Liverpool is expected to perform better at 24.6% and Greater Manchester is predicted to record 23.5% annual growth.
The study, which assumes a substantial proportion of the UK population will have received a Covd-19 vaccine by the middle of next year, highlights a disjoint between the increase in output and employment growth.
Despite rapid GVA growth, Manchester’s employment levels are expected to fall annually by 5.1% at the point when the furlough scheme finishes.
Looking ahead to the end of next year, Manchester’s economic output in the year to Q4 2021 is expected to increase by 6% to £20.8bn and employment will move back into positive territory at 3.7% growth.
Stockport’s GVA will in comparison rise by 7.1% in the 12 months to Q2 2021 and its economy is set to be valued at £6.2bn.
Liverpool is also expected to outperform Manchester with a 7.3% year –on-year growth in GVA and a 5.9% annual rise in employment.
Interestingly, the report finds that the cities in the south of England are expected to emerge from the crisis with the most in-tact labour markets with nine out of the 10 locations for the highest job creation being located in the south.
Expert Opinion“The extension of the furlough scheme has clearly saved jobs and the encouraging news about vaccines will help boost consumer spending and business investment during 2021. Manchester is set to suffer more than other cities next year though and it’s striking that the southern city economies are set to recover more quickly.
“In the last three months of 2021, for example, job creation rates in places like Reading, Exeter and Oxford are predicted to be twice as high as in Manchester. The government has talked a lot recently about its levelling up agenda but it’s time for action, not more words.”
Duncan Hope - Partner
Josie Dent, Managing Economist at Cebr said: “The decision by the Chancellor of the Exchequer to extend the furlough scheme has saved hundreds of thousands of jobs. The impact of the ending of the scheme in March 2021 is expected to be far smaller than it would have been in October 2020, as there is considerable hope that in Spring 2020 the virus will be much more containable. By the end of next year, all Powerhouse cities are expected to be in recovery-phase, with positive annual GVA growth forecast across the board in Q4 2021.”