Northern Powerhouse regions see economic growth

Northern Powerhouse regions see economic growth

In 2012-14, cities that make up the Northern Powerhouse rebounded for the first time since the global economic crisis, with more growth inevitable.

Summary:

  • Economic growth in the north of England has already begun, as the region prepares for years of sustained investment as part of Northern Powerhouse plans
  • The authorities that make up the Northern Powerhouse saw economic growth in 2012-14, rebounding for the first time since the global economic crisis
  • Manchester has seen high levels of institutional investment into its real estate market in 2015, with investors quick to realise the future growth potential of buying in one of the Northern Powerhouse’s core cities

It was launched to help address the economic imbalance between the north and south, but it would appear that cities and counties in the Northern Powerhouse have already begun their growth curve ahead of years of multi-billion pound investment.

This is according to the 2015 Good Growth for Cities Index, compiled by PricewaterhouseCoopers (PwC) and think tank Demos. The report analyses the performance of 39 UK cities based on 10 factors cited by the general public and businesses as top criteria for judging economic success and personal and family wellbeing.

Research found that the local authorities that make up the Northern Powerhouse region grew in 2012-14 and rebounded for the first time since the global economic crisis.

During the global economic crisis and through the proceeding years, the gap between the north of England and other regions widened, in part due to the impact on the manufacturing sector in the wider north in comparison to the quantitative easing on the financial sector in the south-east.

But the report found that, in 2012-14, the Northern Powerhouse narrowed the gap on the rest of the UK, with the region scoring highly in skills, transport and housing affordability.

Yet this growth came while the UK government’s Northern Powerhouse plans were still being mapped out, meaning that the pace at which that economic gap narrows will accelerate in the coming years as a result of sustained investment.

“The three key variables within our index that are important enablers of future growth – transport, skills and housing affordability – provide the region with a strong base,” said Jonathan House, PwC’s Local Government Leader for the North. “But further growth will increase the pressure on transport systems and push up house prices. “Investment in these areas is therefore a priority and given the time needed to plan and complete new projects, any investment needs to be sooner rather than later so as to prepare the ground for future growth.”

Nowhere has investment been made more of a priority in the north than in Manchester. Around 10,000 new private rented sector units are planned in the next few years, fuelled by institutional investment and a demand to acquire rented real estate in a city with one of the youngest demographics in the UK. Crucially, the prospect of strong economic growth and the impact this will have on capital appreciation and yields is driving interest in Manchester from the global investor community.

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