The convention for the PMI index is that a reading above the 50 mark indicates growth, and in December 2017 the Northwest figure was 60.7, compared to 54.9 for the UK as a whole. This shows economic resilience across the British regions, but particularly so in the Northwest. The region outperformed the wider UK throughout the second half of 2017.

Productivity is high in the Northwest. The differential between output charges and input prices in the Northwest suggests pressure on profit margins in the service sector, though that squeeze has eased since Q3 2017.    

Increased business activity in the Northwest has supported office demand and promoted rental growth in Manchester. A diverse mix of occupiers continue to target the area, which is underpinned by growth in the Technology, Media and Telecommunications (TMT) sector. Innovative new businesses are expanding into the city that has been in the vanguard of the UK’s digital media. The Tech Nation 2017 report has estimated that the city currently sustains 62,653 digital jobs, producing an annual output of £2.8 billion.

Manchester’s three highly regarded universities supply a large student population. With a diverse range of business and technology degrees on offer, a large number of graduates provide a skilled entry-level workforce. This talent is being snapped up by dynamic and growing businesses in the area. 

According to leading investment banking firm GP Bullhound, 28% of the 50 fastest growing digital tech companies in the north are located in Manchester. Having taken up ranks in the top 20 European Digital City Index, the city is being supported by its council through two £2 million grants in aid of the creation of two new technology hubs. Moreover, the government is investing £10 million in CityVerve, a project intended to test Internet of Things technology. 

Other exciting developments include the Mi-IDEA facility for start-ups, and the £235million Sir Henry Royce Institute for Advanced Materials Research and Innovation that is due to open in 2019. 

Although no single catalyst can be attributed to the surge in business activity in the Northwest, general M&A activity is driving consolidation and expansion.

Following four consecutive years of take-up exceeding one million square feet, Manchester is the subject of developer attention. After reaching an all-time low in early 2017, Grade A availability has risen thanks to new completions, although levels remain at less than 12months of Grade A supply. Approximately 500,000 sq ft of developed space is due to complete over the next 24 months, meaning market balance will be maintained. 

New supply to Manchester comes at a time when the needs of occupiers are undergoing a major shift. Demand has risen rapidly for flexible and affordable space that promotes collaboration and continued innovation. It is no coincidence that co-working specialist WeWork have chosen Manchester as the first UK city outside London to establish an operation. This move reinforces the trend for short-term short let space, and further cements Greater Manchester’s ability to accommodate demand growth from both corporate and technology focussed occupiers.