Greater Manchester's economy remains resilient but is experiencing only low levels of growth, according to the latest figures from the Greater Manchester Chamber of Commerce. The Quarterly Economic Survey (QES) for the second quarter of 2026 shows a slight weakening, with the headline Greater Manchester Index falling from 15 in Q1 to 13 in Q2.
Key Findings from the QES
Firms surveyed reported being affected by dips in domestic demand and advance orders. The service sector saw a decline, while construction experienced two consecutive quarters of contraction. Service exports also fell, but manufacturing exports rose, showing some positivity in that sector.
The QES figures were unveiled at the Greater Manchester Business Index event, hosted by the Chamber and the Growth Company at The Manchester College's City Campus.
Expert Analysis
Subrahmaniam Krishnan-Harihara, director of business policy and research at the Chamber, commented: "The key issue is that we’ve had a long period of low-level economic growth. We’re not heading towards a recession, but we do have a consistently low level of economic growth. The services-driven decline we’re seeing signals softer consumer spending but there’s been no collapse in manufacturing and construction activity is still resilient."
He added: "The Greater Manchester Index has weakened since the last quarter. There’s no crash but it has certainly weakened compared with the last figure. The Index has been consistently hovering around the 13 to 15 mark."
Manufacturing and Construction Outlook
Mr Krishnan-Harihara noted that manufacturing had seen growth, while the Chamber’s Construction Pipeline Analysis showed £35bn of projects planned over the next five years in Greater Manchester. He said: "Optimism in manufacturing and construction has gone up. Nationally construction is under stress but there is resilience in Greater Manchester. There is some good news about business resilience in the figures, but we need business investment to pick up as we can’t just rely on consumer spending."
Consumer Spending and Confidence
The rise in the Retail Sales Index from April to May indicated people were continuing to spend, but consumer confidence was weakening. Mr Krishnan-Harihara warned: "Many of the services sub-sectors, such as defence and health, are reliant on public sector spending but we can’t rely too much on that during times of financial stress."
He highlighted the challenge for the new Prime Minister: "The key challenge for the new Prime Minister is: where will all the investment funding come from?"
Broader Economic Context
At the QES event, Rupert Greenhalgh, head of business intelligence at The Growth Company, discussed his organisation's research. He said: "There’s no material impact from the Middle East conflict in the figures but longer term it will wash through. In manufacturing the big concern is future orders, and we will probably start to see more stress in that area."
He added: "Uncertainty about hiring means that the number of job vacancies in Greater Manchester is at its lowest level in five years. We’re nowhere near a recession but there’s nothing to shout about in terms of growth."
