GC SITUATION REPORT AND BUSINESS SURVEY RESULTS
Economic Overview
The UK economy is showing modest growth but remains under pressure as it enters the final quarter of 2025. GDP grew by 0.2% in the three months to July, signalling a slowdown from earlier in the year as consumer spending and business investment softened amid persistent inflation and policy uncertainty. Inflation remains elevated at 3.8%, driven by food, hospitality, and transport costs, while the Bank of England has held the base rate steady at 4.0% to balance growth risks against inflation control. Employment edged up to 75.2%, though unemployment rose slightly to 4.7%, reflecting a cooling labour market. Business investment continues to lag due to weak confidence and trade frictions, while household spending remains cautious in the face of high living costs.
Regionally, Greater Manchester’s economy continues to perform resiliently, supported by strong activity in professional services, advanced manufacturing, and digital sectors. Local business confidence remains steady, and entrepreneurial and innovation activity are being driven by targeted support programmes and innovation hubs. However, persistent skills shortages—especially in AI, digital, and technical roles—alongside rising operating costs, are constraining growth potential. The job market is cooling but not collapsing, with vacancies down 2.1% month-on-month yet still above early-year levels, and advertised pay up 8.9%, continuing to outpace inflation. Meanwhile, AI adoption and digital transformation remain bright spots, with 23% of UK firms now integrating AI solutions, underpinned by over £40 billion in private investment, suggesting long-term potential for productivity and regional development.
Survey Summary
The GC-BCI dipped slightly to 7.2, indicating a modest decline in confidence. Optimism remains strong in BFPS, Construction, DCTs, and Hospitality, while sectors such as Retail, Green Tech, Life Sciences, and Engineering show weaker sentiment. Sales and profit expectations are generally stable, with growth anticipated in BFPS, DCTs, and Retail, though Construction, Education, and Health Care are less positive.
Investment and Workforce Trends
Capital investment intentions have risen modestly, led by Engineering, Green Tech, Hospitality, and Manufacturing. Workforce development continues to be a priority, especially in Retail, Education, and Health Care. Rising costs, cashflow pressures, and recruitment challenges persist, though most firms report adequate cash reserves, particularly in Education, Construction, and Manufacturing.
Challenges and Future Plans
Accessing new domestic sales opportunities remains the top challenge, notably for DCTs, BFPS, Healthcare, and Green Tech. Other concerns include product development, business model adaptation, and financial management. Smaller firms seek support in planning, marketing, and innovation, while larger firms focus on skills, recruitment, and digital transformation. Innovation activity is strong, with plans for increased R&D investment, workforce development, and AI adoption in analytics, marketing, and customer support. Skill gaps persist in technical expertise, sales, and leadership.
Key Findings
GC Business Confidence Index (GC-BCI): Business confidence dropped to 7.2 (down from 7.3); confidence higher in BFPS, Construction, DCTs, Hospitality; lower in Retail, Green Tech, Life Sciences, Engineering.
Sales and Profits: 16% reported increased sales; 10% reported decreased sales; 60% expect profit growth; 2% expect profit decline.
Investment: 33% plan to increase capital expenditure; 30% plan to invest in workforce development; optimism highest in Engineering, Green Tech, Hospitality, Manufacturing, Retail.
Cashflow Issues: 12% reported cashflow problems; micro firms most affected, especially in DCTs, Manufacturing, Hospitality.
Trade: 22% export goods/services; 17% expanding into new markets; 12% looking to grow in current overseas markets.
Future Support Needs: Business planning 36%, sales & marketing 31%, innovation 33%, workforce development 30%, financial advice 24%.
Recruitment and Skills: 26% of firms recruiting; higher among SMEs; most active in BFPS, Manufacturing, Education, Green Tech, Retail.
Archived Reports
2025
2024
2023
2022
2021
2020
For more information on this survey, please contact
Sabirah.Chowdhury@growthco.uk