Manchester’s economy is paving a long way to recover before the pandemic despite business optimism

The Chamber of Commerce said Manchester’s economy will not return to the level it was before the Covid-19 pandemic spread until at least 2025.

This is despite the organization’s quarterly economic survey showing that the business community in Greater Manchester is optimistic about a recovery.

The Greater Manchester Chamber of Commerce said the success of the vaccination program and expectations of ending the Covid-19 restrictions contributed to a “degree of cautious optimism” among the 300 business owners who participated.

The survey saw the Greater Manchester Index move into positive territory for the first time since April 2020, with all three industry groups – services, manufacturing and construction – showing signs of recovery.

The index now stands at 6.1, an increase of 24 points compared to the previous quarter’s results.

However, Subrahmaniam Krishnan-Harihara, head of research at the Greater Manchester Chamber of Commerce, told BusinessLive that the city’s economy will not return to pre-pandemic levels, even between 2025 and 2026.

He added that while there will be any improvement in the remaining nine months of 2021, the region needs more time to recover what it has lost.

Mr. Krishnan Harihara said: “Both the Greater Manchester business community and political leaders will be pleased to regain their sense of optimism after the historic economic downturn of 2020.

“ After a long period of restrictions linked to Covid-19, the business community in Greater Manchester appears to be buoyed by the prime minister’s roadmap to exit lockdown and expand support measures for Covid-19 announced by the chancellor in the spring budget.

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Of course, this does not mean that we are “out of danger” yet. The services sector, which includes the hardest hit sectors such as retail, hospitality and entertainment, is still struggling, and the recovery from Covid-19 will be slow and difficult.

The survey results also showed that cash flow conditions are still negative for the three industry groups, which means that more firms are reporting a decrease rather than an improvement.

Capacity utilization also remains low, with only 28% of businesses saying it is operating near full capacity.

“Without a significant improvement in customer demand, companies will not be able to increase their revenues, cash reserves, and operating capacity.

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However, business confidence has improved significantly since December 2020.

“It is now the government’s duty to build on the current improvement and optimism by providing the absolute clarity of the roadmap to exit from the shutdown so that companies, especially those in the sectors most affected, can purchase new shares or plan how they will operate.

“The roots of the recovery we are witnessing now are too valuable to be missed.”

Driven by activity in the construction industry, current sales and pre-orders from local customers increased from the fourth quarter of 2020, but the Chamber said there was a “distinct emerging difference” in the performance of different sectors.

While nearly half of those in the construction sector reported an improvement in sales, less than a third of firms in the manufacturing and services sector said their sales to UK customers increased in the quarter.

In contrast, a third of respondents from the manufacturing sector and 40% from the services sector reported a decrease in sales in the quarter.

Services sectors account for more than 80% of the metropolitan area’s economy, which means that further revival of services is needed for the economy as a whole to start growing again.

The Greater Manchester Chamber is the largest organization of its kind in the United Kingdom and has its roots in 1794.

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