Greater Manchester’s productivity resurgence

03.06.23

Greater Manchester is experiencing the beginning of a productivity resurgence as new analysis from economic consultancy Metro Dynamics the Northern Powerhouse Partnership (NPP) shows the city region’s productivity growth outstripping that of comparable Northern cities and closing the gap with London.

Economic success has not been limited to the city centre. Evidence shows that income and productivity growth is being felt across Greater Manchester more widely thanks to investment in intracity transport connectivity, supporting the argument that towns are helped – not hindered – by links to nearby cities. 

Manchester’s Metrolink tram network, which was opened by the late Queen in 1992, has played a pivotal role in transforming the city region’s economic fortunes over the past three decades.

As well as driving up wages and productivity, house prices within half a mile of Bury’s tram stop quadrupled between 1995 and 2021.

The only boroughs not to have felt the same level of productivity and income growth are those in the north west of the city region which are not connected to the tram network, such as Wigan and Leigh – Mayor Andy Burnham’s former constituency.

This will prompt a debate on how the forthcoming roll out of the Bee Network – Greater Manchester’s vision for an integrated London-style transport system – could help these places.

Devolution is also thought to have played a key role in supporting the city’s economic transformation. 

In 2014, Greater Manchester became the first English city region outside London to secure a devolution settlement, after the combined authority was brought together at the end of New Labour’s term in office.

More recently Greater Manchester Combined Authority secured further powers and flexibility in a ‘trailblazer’ deal, including 100% business rates retention and key responsibilities over the adult skills programme.

NPP’s new Chair Lord Jim O’Neill, who as Treasury minister helped to design the original Northern Powerhouse vision with then Chancellor George Osborne CH, says the data is proof that their model – based on agglomeration and empowered local leadership – works.

Lord Jim O’Neill, Chair of the Northern Powerhouse Partnership, said: “The recent productivity growth across Manchester, and Greater Manchester even more so, means that the gap with London is now starting to close.

“We’re now seeing signs that addressing transport, with a consistent focus on securing agglomeration benefits, is starting to bear fruit.

“Building on and replicating Greater Manchester’s success across the North, and scaling it to create an effective pan-northern labour market, is key to solving our overall productivity challenge.”

Mike Emmerich, Founding Director of Metro Dynamics, said: “Some have assumed that Manchester’s success has been limited to the city but this is evidence that productivity growth has been spread much more evenly across most of the whole city region, specifically those areas which have received investment in transport.

“Over the past three decades, Greater Manchester has taken a consistent and common economic and investment strategy including on transport, and we’re now seeing the green shoots of a productivity resurgence as a result.

“It’s perhaps no surprise, therefore, that many other city regions across the North and England more widely have decided to follow the same course.”