Businesses across the North West are displaying renewed confidence about their prospects, even as economic activity remained subdued in October, fresh data from NatWest has shown.
The region’s Business Activity Index climbed to 49.6 last month, up from September’s 47.6, though still marginally below the growth threshold of 50.
Companies reported more moderate declines in new orders and staffing levels compared to previous months.
Employment reductions slowed to their most modest pace since the downturn began twelve months ago, with workforce numbers falling only marginally.
Malcolm Buchanan, chair of the NatWest North Regional Board, noted that while challenges persist, October’s figures painted a more encouraging picture.
“Business expectations have crept up, with local firms generally forecasting growth in the year ahead,” he said.
A comprehensive study by Oxford Economics has identified Greater Manchester as the nation’s standout economic success story, achieving the most robust productivity gains of any mayoral combined authority since the 2008 financial downturn.
The region has recorded productivity growth of 31 per cent since 2004, substantially outperforming the national average.
The analysis reveals that Manchester’s gross value added per hour worked has surged ahead of all other combined authorities, while the capital has experienced virtual stagnation.
London’s productivity expanded by merely 0.2 per cent annually up to 2024, compared to the national figure of 0.6 per cent.
Fresh data from NatWest reveals that businesses across the North West are displaying renewed confidence about their prospects
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Alexander Harvey, the report’s author, described Greater Manchester as the “star performer” among UK city-regions, successfully pairing productivity improvements with robust employment expansion.
Manchester’s transformation has been underpinned by its pioneering role in English devolution, establishing the first mayoral combined authority and securing enhanced powers over local decision-making.
The city-region made history this year by returning buses to public control, becoming the first outside London to implement franchising.
Transport connectivity has emerged as a crucial productivity driver, with improved local connections expanding the talent pool available to businesses.
The region is now focusing on rail improvements to strengthen links both locally and with other major cities.
Manchester’s strong economic performance
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Oxford Economic/CHATGPT
Skills development represents another cornerstone of the strategy.
The Greater Manchester Baccalaureate, developed in partnership with regional employers, offers young people alternative pathways to high-quality employment.
This initiative addresses critical skills shortages while complementing the graduate talent emerging from the area’s prestigious universities.
The region’s industrial composition has shifted dramatically, with Knowledge Intensive Business Services emerging as a particular bright spot.
Employment in this sector has expanded more rapidly than in London or any other mayoral combined authority, with approximately half these positions based in Manchester’s city centre.
This sectoral transformation has positioned Greater Manchester favourably compared to the national industrial average.
Meanwhile, Sadiq Khan’s London suffers economic stagnation, largely attributed to its housing crisis | Greater London Authority
The concentration of high-productivity roles has accelerated since 2008, contributing to the city centre’s remarkable 3.6 per cent average annual GVA growth rate.
Oxford Economics highlighted this performance as “far higher” than growth rates in other combined authority centres and significantly stronger than the UK’s 1.4 per cent annual expansion over the same period.
The capital’s economic challenges have created fresh opportunities for Manchester to establish itself as Britain’s premier alternative business hub.
Housing affordability constraints in London are driving skilled workers and companies northward, with 58 per cent of financial services head office positions now located outside the capital.
James Chaplin, chief executive of Vacancysoft, praised Manchester’s success in positioning itself as an attractive destination for financial services operations.
He said companies are increasingly reorganising their operations across multiple locations, reducing their London presence in favour of regional centres.
This shift reflects broader economic realities.
Oxford Economics noted that elevated housing costs in the capital are limiting agglomeration benefits by forcing workers to live further from employment centres, undermining the traditional advantages of urban concentration that have historically driven London’s economic dominance.
