According to EY’s latest Regional Economic Forecast, Manchester is set to see the third-fastest economic growth of all UK towns and cities between 2024 and 2026.
When measured by Gross Value Added (GVA), Manchester’s economy is expected to see annual average growth of 2.5% between 2024 and 2026, comfortably outpacing the national growth rate (2.1%). Only Reading (2.7%) and London (2.6%) are expected to see faster growth than Manchester during this time.
By 2026, GVA in Manchester’s local economy is expected to be £2bn larger than in 2022.
Manchester’s positive outlook is supported by the strength of the city’s professional, scientific & technical, and financial & insurance activities sectors.
As a whole, the North West is expected to see annual average growth of 2% over the same period – a bounce back from the 0.7% contraction forecast for 2023.
The report also shows that Manchester is expected to record the fastest rate of employment growth of any UK town or city from 2024 to 2026, with job numbers in the city forecast to grow 1.8% per year over the period. This is above the national average as UK jobs are expected to grow by around 1.3% a year, and North West jobs are expected to be up 1.2% each year.
The North West is expected to have the fastest-growing economy in the North of England between 2024 and 2026.
Stephen Church, EY’s North Market Leader, said: “The North is home to many of the UK’s most dynamic and innovative businesses and, while the next 12 months will be economically challenging, there are areas across the region where we can expect to see encouraging growth over the next few years. The North’s cities are set to be particularly strong performers.
“However, progress is about the whole of our region, not just our bigger cities. And while several towns and cities are expected to see better economic and employment growth than many other parts of the country, too many places are still expected to trail behind.
“To spread growth, not just throughout the country, but throughout regions too, it is critical that the public and private sectors work together to combine their expertise, strengths, and capabilities. The North needs both working in tandem to succeed.
“Looking ahead, the regions across the North need their own clear strategies for growth, which reflect each region’s own strengths and unique attributes. Getting the right sector mix is key, and investment in high-value sectors and skills can help build a sustainable future – not just for the North, but for the whole country too.”
Manchester’s economic output is forecast to be 97.8% of its pre-pandemic levels by the end of 2022. Interestingly, economic output for Greater Manchester is slightly closer to pre-pandemic levels, with an output of 99.1% of 2019 levels. This indicates that areas outside the city centre in Greater Manchester have recovered quicker than the rest of the country.
This is reflected in the strength of the region’s new growth locations and innovation clusters. For example, Rochdale will be home to the North East Growth Corridor and Atom Valley. The report shows that this town is expected to see its economic growth only marginally outpaced by the regional and national rates, with an average of 1.9% growth per year forecast for each from 2024 to 2026.