Latest Economic Survey Reports Substantial Increase in Customer Demand

The success of the vaccination programme and relaxation of Covid-19 restrictions have contributed to a substantial increase in customer demand, according to the findings of this quarter's Economic Survey (QES) conducted by Greater Manchester Chamber of Commerce.

The QES based composite indicator for our city region, the Greater Manchester Index, improved by 24 points as all three sector groups – services, manufacturing and construction show signs of a rebound after the economic shock of 2020. The survey of over 300 businesses reveals that sales to both domestic and overseas customers increased in this quarter.

The Greater Manchester Index now stands at 30.4, an increase of 24 points from the previous quarter’s results. Led by construction sector activity, current sales and advance orders from domestic customers increased relative to Q1 2021. The divergence seen in Q1 in the performance of different sectors has narrowed down. Whilst 60% of construction sector respondents reported improved sales, just over half of manufacturing and service sector businesses reported that their sales to UK customers had increased in this quarter. Since the services group accounts for well over 80% of the city region’s economy, sustained economic recovery depends on growth in services.

The balances relating to international trade have improved this quarter and are above zero for the first time since April 2020. More businesses engaged in international trade are slowly getting used to the new regulations and requirements under the EU-UK Trade and Cooperation Agreement but trade with EU partners has been impacted.

Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said: “It will be a relief to both Greater Manchester’s business community and political leadership that there is now a strong rebound in the city region’s economy. After a long period of Covid-19 related restrictions, Greater Manchester’s business community seems buoyed by relaxation of restrictions. Although the postponement of the last phase of restrictions has caused some concern, this quarter’s results reveal robust growth as consumer spending has increased. The services sector, which includes the worst affected sectors of retail, hospitality and leisure has now started to grow again.”

“The survey results also showed that cash flow positions have improved in line the improvement in customer demand. Capacity utilisation remains modest with only 40% of businesses reporting that they are operating near full capacity. Without sustained improvement in customer demand, businesses will not be able to raise enough revenues to invest in expanding productive capacity. The results reveal that there are concerns around rising operational costs, probably as a result of anxiety around having to meet deferred tax liability on repay debt taken on during the pandemic. As a result, discretionary business spending is still low.

“Of particular concern is that some age-old problems have resurfaced: as businesses try to recruit staff, recruitment difficulties have gone up. In the last few days, we have seen numerous reports about labour shortages in disparate occupations such as chefs, health workers and truck drivers. To ensure that labour shortages do not cause wage inflation and present a bottleneck to economic growth, it is incumbent upon government to help Greater Manchester’s businesses and educational institutions with the support and funding they need to deliver training and upskilling that meets employers’ needs. We have to look beyond this immediate optimism to fix the fundamentals to secure the opportunity to rebuild and renew our economy.”


Notes to Editors

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About Greater Manchester Chamber of Commerce:
• Greater Manchester Chamber is the largest Chamber of Commerce in the UK.
• We provide first-class business support through a range of tailored services and networking opportunities and use our influence with local and central government to lobby on behalf of our members as the voice of the Greater Manchester business community.
• The Chamber is an independent, not-for-profit private company, working to create a better business environment for its members.
• The Chamber covers Manchester, Salford, Wigan, Bolton, Bury, Rochdale, Oldham, Trafford, Tameside and Stockport
• We are an accredited member of the British Chambers of Commerce – one of only 53 chambers across the UK.
• Greater Manchester Chamber was founded in 2004, but traces its roots back to 1794.

About Greater Manchester Chamber of Commerce

Greater Manchester Chamber of Commerce is the largest Chamber of Commerce in the UK, providing business support to approximately 4,500 members who collectively employ 446,000 people, around one-third of Greater Manchester’s workforce. Recognised as a leader in its field, Greater Manchester Chamber’s reputation in government circles has grown locally and nationally. At the heart of the area of greatest economic intensity outside London and the South East, the Chamber is the primary body for business support, policy, representation and networking. The Chamber is an independent, not-for-profit private company and its aim is to support businesses and help create the best climate for the region to prosper. This is achieved by ensuring that those taking decisions on key issues such as transport, taxation and business regulation hear the voice of our members. The representation of our members’ views is central to the work of the policy team at the Chamber; these views are gathered in a range of ways including our local councils, policy committees, sector councils, the main Chamber council, focus groups, meetings with politicians and consultations. The Chamber also offers a range of networking forums across Greater Manchester, free as part of membership, plus a variety of other events and services designed to benefit specific sectors or individuals and help businesses to grow.

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