Quarterly Economy Update March 2021 Welfare and work Residents claiming unemployment benefits in increased by 92% since March – compared to 102% nationally Currently 34,305 resident claimants – representing 8.8% of the total working age population

35,000 34,255 34,775 34,645 34,510 34,335 34,305 33,745 33,740 33,915

33,000

31,000

28,665 29,000

27,000

25,000

23,000 Claimant Count Claimant

21,000

19,000 17,740 17,410 17,000 16,390 16,325 16,390

15,000 November December January February March 2020 April 2020 May 2020 June 2020 July 2020 August September October November December January 2019 2019 2020 2020 2020 2020 2020 2020 2020 2020 Source: ONS Manchester has the second highest unemployment rate in GM Claimant count unemployment rate highest in Oldham in January (9.4%) – lowest in Trafford (5.1%)

10.0% 9.4%

9.0% 8.8% 8.3% 8.3% 8.2% 7.8% 8.0% 7.6%

7.0% 6.8% 6.8% 6.4% 6.2% 6.0% 5.8% 5.1% 5.0%

4.0%

% of working age population of% working age 3.0%

2.0%

1.0%

0.0% UK North West GM Bolton Bury Manchester Oldham Rochdale Salford Stockport Tameside Trafford Wigan March May August Jan-21 In work claimants (particularly those aged under 30) accounting for an increasingproportionclaimantsfor an of UC In workunderaccounting claimants(particularly 30) aged those

Universal Credit Claimants 80,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000 - Total UC claimants in Manchester grown by 85% since March 2020 March since 85% by grown in Manchester claimants UC Total Jan-20 12,513 26,427 Feb-20 12,979 27,813 Mar-20

13,366 28,756 numbersof residents insecureworklowinpaid/ Apr-20 18,995 37,429 In In ClaimantsWork May-20

22,016 45,220 Jun-20 22,966 46,519 Out WorkOut Claimants Jul-20 24,206 46,723 Aug-20

24,973 47,262 Sep-20 26,113 47,602 Oct-20 26,987 47,492 Nov-20 – Source: Source: Xplore DWP Stat 28,306 48,173 linkedto growing Dec-20

28,989 48,889 Growing concentrations of UC claimants in East Manchester since March 2020 44% of new UC claimants since March are in work

Gorton & & Clayton & Charlestown Whalley Range Higher Cheetham Moston Brooklands Chorlton Park & Beswick West Didsbury East Chorlton 0 200 400 600 800 1000 1200 1400 1600 Change in UC Claimants – March - December 2020

In Work Out of Work c.38,800 furloughed resident jobs in Manchester (January 2021) – 16% of eligible jobs Increase in employees furloughed in November & January reflects the introduction of subsequent national lockdowns

14,000

12,000

10,000

8,000

6,000

4,000 Total Employees Furloughed Employees Total

2,000

0 Manchester Central Blackley and Broughton* and Sale East* Manchester Manchester Withington

Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 (p)

July 2020 Aug 2020 Sept 2020 Oct 2020 Nov 2020 Dec 2020 Jan 2021 (p)

Manchester 45,900 33,900 26,800 23,000 35,500 34,400 38,800

Greater Manchester 213,300 157,100 121,900 103,900 160,700 158,600 184,600

England 4,234,200 3,092,700 2,328,900 1,897,400 3,209,500 3,186,200 3,769,700

*Parts of Blackley & Broughton and Wythenshawe & Sale East are outside the Manchester boundary Manchester job postings declined in March in response to COVID but seem less sensitive to further lockdowns Most live job ads are for IT Jobs and Sales Jobs and the top companies hiring are The Hut Group, AECOM and Spires Online Tutoring

1800 COVID-19 1st Lockdown COVID-19 2nd Lockdown COVID-19 3rd Lockdown

1600

1400

1200

1000

800

600

400 Number of job vacancies advertised during the week theduring advertised vacancies ofjobNumber 200

0

Pressional Occupations Associate Pressional And Technical Occupations Managers, Directors And Senior ficials Administrative And Secretarial Occupations Sales And Customer Service Occupations Other Source: Burning Glass Technologies - Labour Insights, produced by GMCA Housing benefit (UC & HB) claimants increased by c.20% since March 2020 Majority of growth (c.8,700 claimants) from households living in the private rented sector (PRS)

80,000 COVID-19 - 1st Lockdown

70,000

60,000

50,000

40,000

30,000 Total Claimants (UC (UC HB) & Claimants Total

20,000

10,000

- Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Social Rented Claimants Private Rented Claimants

Source: DWP Number of claimants in the PRS growing in both high & low value neighbourhoods But largest concentrations remain in North & East Manchester

Piccadilly Whalley Range Hulme Moss Side Gorton & Abbey Hey Levenshulme Clayton & Openshaw Deansgate Withington Longsight Harpurhey Ardwick Miles Platting… Old Moat Fallowfield Crumpsall Burnage Cheetham Chorlton Park Ancoats & Beswick Moston Charlestown Rusholme Northenden Chorlton Woodhouse Park Didsbury East Baguley Brooklands Sharston 0 50 100 150 200 250 300 350 400 450 Change in LHA Claimants in PRS – Mar-Nov 2020

Source: DWP Businesses & Business Rates Total Business Rates charges have fallen from £378m to £226m (c.40%) since April 2020 Biggest drop off in charges from retail, services & food sector – linked to Covid-19 extended retail relief

£400,000,000

£350,000,000

£300,000,000

£250,000,000

£200,000,000

£150,000,000 Total Business Rates Charges Business Rates Total

£100,000,000

£50,000,000

£- Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Office Health & Public Services Industrial Retail, Services & Food Other Source: MCC Revenues & Benefits Business deaths rising – likely just an administrative lag as Companies House suspended activity during the first lockdown Hard impact of COVID-19 on businesses not expected to show in the Experian data until later in the year

1200

1000 Automatic strike-off and company obligations were suspended from April to 800 June during lockdown by Companies House

600

400

200

0

Number of business deaths Number of limited births Number of non-limited births Source: Experian Recent lockdowns not impacting footfall to the same extent – district centres more resilient Location of city centre cameras only capturing certain types of city centre activity (predominantly retail trips)

10.00%

0.00%

-10.00%

-20.00%

-30.00%

-40.00%

-50.00%

-60.00% Weekly Footfall (Change V 2019)(ChangeV Footfall Weekly -70.00%

-80.00%

-90.00%

-100.00%

City Centre* District Centres**

*City Centre data on Market Street, Exchange Square, St Ann's Square and King Street **District Centre data in Cheetham Hill, Chorlton, Fallowfield, Gorton, Harpurhey, Levenshulme, Northenden, Rusholme, Blackley & Withington Source: Springboard Decreased sales & restrictions on business travel the main impacts of COVID-19 reported by businesses in Manchester 60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

Manchester GM Source: Growth Company Business Survey (29/01/2021 - 15/02/2021) Total number of export documents in January 2021 is down -35% compared to last February This is likely to be due to disruption caused since the Brexit transition period ended on 31st December

2900

2700

2500

2300

2100

1900

1700

1500 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Source: GM Chamber of Commerce Commercial Property Planning activity not impacted by subsequent lockdowns to the same extent as in March 2020 Recent applications include the redevelopment of the Kendals (c.66,800m²) & the 1st phase of the Village regeneration (244 homes)

80 Covid-19 1st Lockdown Covid-19 2nd Lockdown Covid-19 3rd Lockdown

70

60

50

40

30 Planning Apps Submitted AppsPlanning

20

10

- 06-Jan 06-Feb 06-Mar 06-Apr 06-May 06-Jun 06-Jul 06-Aug 06-Sep 06-Oct 06-Nov 06-Dec 06-Jan 06-Feb City Centre Manchester (excl. City Centre) Source: MCC Planning, Building Control & Licensing Over 623,782m² of commercial space on site in the city (not including hotels & car parks) 215,227m² of this is office space – 93% of which is being developed in the city centre

200,000

180,000

160,000

140,000

120,000

site (m²) site -

100,000

80,000 Total Floorspace on Floorspace Total 60,000

40,000

20,000

0 City Centre Manchester (Excl. City Centre) B1: Office D1: Public Services A: Retail Sui Generis D2: Leisure B2-8: Industrial office market significantly buoyed by Q4 deals – take up only 7% below this time last year £325m of deals recorded in the city’s office market last year, more than any other major UK city outside London

500000

450000

400000

350000

300000

up (sq. ft.) (sq. up -

250000

200000

City centre office take office Citycentre 150000

100000

50000

0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 *City centre includes parts of central Salford Manchester Birmingham Bristol Leeds Liverpool Source: Avision Young – The Big Nine Manchester city centre headline rents have also increased to £38.50 per sq. ft. This is now above any major city in outside of London

£40.00

£38.00

£36.00

£34.00 )

£32.00 psf

£30.00

£28.00 Headline rents (£ rents Headline

£26.00

£24.00

£22.00

£20.00 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020

Manchester Birmingham Bristol Leeds Liverpool Source: Avision Young – The Big Nine 2,403 new hotel rooms in the city centre by 2022/23 Creating significant challenges for occupancy rates to recover

14,000

12,000

6,804 10,000 6,529

5,706

5,261 8,000 4,892 4,313

4,017 4,313 6,000

City centre hotel room stock room hotel centre City 4,000 5,922 6,092 5,272 4,445 4,611 4,445 3,970 3,970 2,000

729 1,005 1,005 1,005 1,005 1,005 0 433 433 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Self-catering / serviced apartments 3 star & below 4 & 5 star Residential Property Long term void rate slightly up since the start of the COVID-19 crisis at 0.8% in the city centre & 0.5% elsewhere However this remains around the lowest it's ever been & considerably lower than the void rates experienced following the 2008 downturn

4,000

3,500

3,000

2,500

2,000

1,500 Long Term Voids (6+ Months) (6+ Voids Term Long 1,000

500

0

July July July July July July July July

May May May May May May May May

March March March March March March March March

January January January January January January January January January

November November November November November November November November

September September September September September September September September 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Manchester (excl. City Centre) City Centre

Source: MCC Council Tax Records Average rents (2beds) across Manchester remain above the LHA rate Activity outside the city centre concentrated in South Manchester – driving recent rental inflation

£1,050 Covid-19

£1,000

£950

£900

£850

£800

£750

£700

£650 Average Rent (2Beds) Rent Average £600

£550

£500

£450

£400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 City Centre Manchester (Excl. City Centre) Manchester LHA Rate

* In April 2020, the LHA rate was increased by Government to reflect changes in rents across various parts of the country – it is due to be frozen again in cash terms from 2021/22. Sales market remaining subdued across Manchester Temporary SDLT reforms have failed to boost demand in Manchester – aren’t outweighing uncertain economic outlook

Temporary Covid-19 SDLT Reform 1,800

1,600

1,400

1,200

1,000

800

600

400 Sale Volumes (Land Registry January 2021) Registry (Land Volumes Sale

200

- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 City Centre Manchester (Excl. City Centre) Over homes 9,500 on site across the city, including over 840 affordable homes c.7,900 homes expected to complete in the city centre & c.2,800 homes expected elsewhere within the next 3 years

3,500

3,000

2,500

2,000

1,500 Expected Completions

1,000

500

- City Centre Rest of City City Centre Rest of City City Centre Rest of City 2020-21* 2021-22* 2022-23*

Open Market Sale Private Rented Sector Affordable Completion figures from 2020-21 onwards are estimates - accurate as of 25th Feb 2021 Based on an analysis of recent MCC residential planning applications Source: MCC Residential Development Tracker Transport & Visitor Economy Hotel occupancy at 15% in December 2020 compared to 78% this time last year At the time, residents who lived in Tier 1 or 2 areas had to avoid staying overnight in very-high (i.e. Tier 3) areas like Manchester

100%

90%

80%

70%

N.B. January, 60% February and March 2020 data not 50% published. Hotels closed due to COVID- 19 lockdown from Hotel Occupancy Hotel 40% mid March through to July 30%

20%

10%

0%

Jul-18 Jul-19 Jul-20

Jan-18 Jan-19 Jan-20

Jun-19 Jun-18 Jun-20

Oct-18 Oct-19 Oct-20

Apr-18 Apr-19 Apr-20

Feb-18 Sep-18 Feb-19 Sep-19 Feb-20 Sep-20

Dec-18 Dec-19 Dec-20

Aug-18 Aug-19 Aug-20

Nov-18 Nov-19 Nov-20

Mar-19 Mar-18 Mar-20

May-18 May-19 May-20

Hotel room occupancy rate - Manchester city centre Hotel room occupancy rate - Source: STR Total Airbnb listings in Manchester stabilised following onset of the Covid-19 pandemic Evidence that a significant number of hosts switched their properties from Airbnb to the mainstream market at the beginning of the pandemic - however the market seems to have stabilised

2,500

2,090

2,064 1,990

2,000

1,858

1,831

1,814

1,804

1,724

1,661

1,658 1,586

1,500 1,416

1,370

1,365

1,321

1,285

1,270

1,259

1,215

1,202

1,197

1,157

1,147

1,120

1,085

1,081

1,062

1,011

994 994

993 993 Total Listings Total

1,000 930 821 821

500

- Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 City Centre Manchester (excl. City Centre) Source: AirDNA Airport passenger numbers showing few signs of recovery Impact of introduction of hotel quarantines and 3rd lockdown yet to be seen

8,000,000 Covid-19

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000 Total Airport Passengers Airport Total

2,000,000

1,000,000

- Jan Feb Mar Apr MayJune July Aug Sep Oct Nov Dec Jan Feb Mar Apr MayJune July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 2019 2020 2021 Manchester Heathrow Gatwick Stansted Birmingham

Source: Civil Aviation Authority Public transport use remains below pre-Covid baseline Decline in cycling since October understood to be linked to the weather

100.0%

50.0% Lockdown Baseline Lockdown

- 0.0%

06-Jul 13-Jul 20-Jul 27-Jul

04-Jan 11-Jan 18-Jan 25-Jan

01-Jun 08-Jun 15-Jun 22-Jun 29-Jun

05-Oct 12-Oct 19-Oct 26-Oct

06-Apr 13-Apr 20-Apr 27-Apr

07-Sep 14-Sep 21-Sep 28-Sep 01-Feb 08-Feb

07-Dec 14-Dec 21-Dec 28-Dec

03-Aug 10-Aug 17-Aug 24-Aug 31-Aug

02-Nov 09-Nov 16-Nov 23-Nov 30-Nov

09-Mar 16-Mar 23-Mar 30-Mar

04-May 11-May 18-May 25-May Change Since Pre Since Change

-50.0%

-100.0% Bus Highway Metrolink Rail* Cycling* Source: TfGM *Rail travel = Piccadilly train station footfall Data for highways, Metrolink, bus and rail are reported daily. Data for cycling is reported on a weekly basis. Quarterly Economy Update March 2021