Greater Manchester Local Economic Assessment: Stockport

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Greater Manchester Local Economic Assessment: Stockport Greater Manchester Local Economic Assessment: Stockport A report for Association of Greater Manchester Authorities Submitted 8 November 2010 Dr Alexander Roy Head of Economic Analysis 1 INTRODUCTION 1.1 Stockport is one of Greater Manchester’s strongest districts, with a robust economy, a strong quality of life offer, and excellent connectivity both with the rest of Greater Manchester and externally – sitting on the M60 motorway and West Coast Mainline, and adjacent to Manchester Airport. Stockport’s position as one of the most affluent areas of Greater Manchester, alongside Trafford and Bury, is bolstered by relatively quick access to areas of Cheshire and Derbyshire, and significant train links through Stockport and Cheadle Hulme towards Manchester city centre. 1.2 Recent research by the Northern Way classified Stockport as having an ‘interdependent’ relationship with the rest of the Greater Manchester economy, providing a critical supply of graduate labour to the city’s economy, whilst at the same time having a relatively strong economy itself.1 Stockport has developed centres of high-value employment and attracts significant commuting flows in from the rest of Greater Manchester and its surrounding districts outside the city, leading to mutually beneficial economic relationships. 1.3 The borough has a similar industrial profile to the conurbation core and one that is likely to further benefit from the continued growth in Greater Manchester and its centre.2 Indeed, the UK Competitiveness Index 2010 ranked Stockport marginally ahead of Manchester – showing the borough to be one of the most competitive districts in Greater Manchester (behind only Trafford) – although still ranked below many southern authorities in a UK context (Stockport is ranked 126th nationwide).3 1 Northern Way: City Relationships: Economic linkages in northern city regions, November 2009 http://www.thenorthernway.co.uk/downloaddoc.asp?id=707 2Northern Way: City Relationships: Economic linkages in northern city regions, November 2009 http://www.thenorthernway.co.uk/downloaddoc.asp?id=707 3 UK Competitiveness Index 2010, Centre for International Competitiveness, http://www.cforic.org/pages/ukci2010.php Manchester’s Commission for the New Economy 02 Figure 1: Stockport local physical assets Source: GMPTE, 2010 Manchester’s Commission for the New Economy 03 2 BUSINESS BASE 2.1 Stockport has a strong and productive business base, which is a key driver of growth for the Greater Manchester economy, with GVA per capita far higher than the GM average. The borough sits within GM South, which has been the driver of growth in the conurbation over the last decade and is the UK’s largest economic area outside London.4 2.2 The driver of Stockport’s growth has been its strong private sector – with Stockport second only to Salford in terms of private sector-led economic growth between 2003 and 2008 (growth of 9,500 private sector jobs), well above the GM South growth of 4.3 % and significantly higher than the rate of increase in both GM (2.4%) and Great Britain (5.5%) over the same period. As a result of this economic success, Stockport has the second largest business base (10,200 registered enterprises) and the second highest proportion of private sector employment (workplace-based) in Greater Manchester. Figure 2: Public sector and private sector growth in Stockport and Greater Manchester 2003-2008 12.0% 9.9% 10.0% 8.0% 6.0% 5.5% 4.9% % EMPLOYMENT GROWTH 4.0% 3.7% 2.4% 2.0% 0.0% 0.0% STOCKPORT GM GB PUBLIC PRIVATE Source: ONS Sub-regional public and private sector Estimates, 2010 4 GM South comprises the Stockport, Trafford, Tameside and the Cities of Manchester and Salford and is the only NUTS3 area outside of London to generate GVA of over £30bn. (2007 data in ONS Regional Accounts). Manchester’s Commission for the New Economy 04 2.3 In terms of the structure of its business base, Stockport has a similar sectoral profile to the city core, with above average representation of ICT/Digital Communications, Creative/Digital/New Media, and Financial & Professional Services in the borough, all contributing to higher than average earnings. 2.4 Despite its similar sectoral composition however, the size of Stockport’s businesses looks different to that seen in the city core – with a larger proportion of small (1 to 10 employees) businesses; though there is also a concentration of head office activity within the district. The high presence of SMEs is highlighted by the fact that business density rates (businesses per 10,000 of working age population) are higher in Stockport than any other Greater Manchester district except for Trafford, and are significantly above Greater Manchester and national rates. This suggests that Stockport is an attractive location for SMEs – which may include those looking for lower costs than the conurbation core – and can also draw on a skilled resident population to form new businesses. The large number of smaller businesses may also reflect the growth in recent years of sectors with a high presence of SMEs, such as creative and digital industries. 2.5 The fact that business survival rates are also good in the district shows that the quality of new enterprises being formed are of a good standard – with Stockport having the highest percentage of new enterprises that survive for 5 years or beyond in Greater Manchester (46.9% cf. 44.7% in GM). 2.6 The entrepreneurial nature of the Stockport economy is further highlighted by Business Link North West data on high-growth firms5, which shows that Stockport has the third highest presence of high-growth firms in Greater Manchester (behind the City of Manchester and Trafford) – again reflecting Stockport’s strong private sector and key strategic location. 2.7 However, it is informative to note that the data on high-growth firms also shows that Stockport has a relatively low number of high-growth firms as a proportion of the overall Stockport business base. This shows that, although Stockport has a large base of highly-productive and growing firms, there is clearly scope to improve the quality of its business base as a whole, and to further take advantage of its strong transport linkages and skilled resident population. 2.8 In summary therefore, it is clear that Stockport has a large business base that includes dynamic and resilient firms, but also has scope to increase its productivity further. The fact that no single industry or sector dominates the borough’s economic base is a significant strength for the economy as it 5 Business Link define a high-growth firm as a business that: Is less than 10 years old and has between 10 and 249 employees (at the start of the period) with a 20 % increase in turnover or number of employees in the last year Has 10+ employees that has reached an annual turnover of £1M in its first 3 years and who exhibits a potential to grow by 20 % each year for the next 3 years Is in a “High Growth Commercial” MOSAIC type and therefore exhibits characteristics or behaviours that are known high-growth drivers. Manchester’s Commission for the New Economy 05 provides diverse opportunities for growth and spreads risk. The borough is therefore in a relatively good position to cope with the challenges of the downturn and take advantage of opportunities that arise when growth returns. 2.9 Despite the recent economic downturn, which has particularly affected certain aspects of the Financial & Professional Services sector, forecasts show that Financial and Professional Services will be key to both the Greater Manchester and Stockport economies over the medium to long-term and will play a crucial part in driving the recovery. Manchester’s Commission for the New Economy 06 Figure 3: Stockport employment composition, 2008 EDUCATION: 7.6% MANUFACTURING: CREATIVE: 6.4% (-0.3%) 10.4% (-32.1%) (+7.4%) PUBLIC ADMIN: 4.3% (+33.2%) TEXTILES: 0.3% (-78.5%) ICT DIGITAL: 3.8% ENGINEERING: 4.6% (+8.7%) (-37.2%) FOOD AND DRINK: 1 1.4% (+7.7%) RETAIL: 10.7% LOGISTICS: (+3.5%) 3.1% (+47.0%) AUTO: 2.1% (-33.0%) SPORT: 1.1% (+50.8%) CONSTRUCTION: 11.8% (+97.1%) FINANCIAL AND HEALTH: 12.3% PROFESSIONAL (+26.5%) SERVICES: 15.7% (+39.6) NON-HEALTH RELATED LIFE SCIENCES: 3.0% (+23.1%) FINANCIAL: 4.1% (+32.2%) KEY High Growth Growth Decline High Decline (98-08) (98-08) (98-08) (98-08) Source: Annual Business Inquiry, 2010 Manchester’s Commission for the New Economy 07 PUBLIC SECTOR 2.10 A further indication of the strength of Stockport’s economy is that Stockport has the second smallest public sector in Greater Manchester. 21,700 people work in the public sector in Stockport, accounting for 17.1% of the total employment – significantly lower than proportions in GM (20.4%) and in Great Britain (20.3%). 2.11 In terms of the public sector employment, there was no overall change between 2003 to 2008 in Stockport – with employment falling significantly before returning to 2003 levels of employment by 2008, with 21,700 employees (0% overall change). In comparison, the public sector in Greater Manchester and Great Britain saw a large increase in employment, with 3.7% more jobs across the conurbation and 4.9% more nationally. 2.12 The data shows that general secondary education provides a large amount of employment in Stockport, with 3,000 employees accounting for 2.4% of total employment. This sub sector is 14% larger than the national average. 2.13 Technical and vocational secondary education is another important sub sector, accounting for 1,200 jobs. The sub-sector accounts for 1.0% of total employment and is 41% larger than the national average, indicating that it has a significantly higher level of employment than Great Britain as a whole.
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