2018 Outlook: What lies ahead for the North West’s commercial sectors?
After 2016 was shaken by the vote for Brexit, 2017 took an unexpected turn with a snap General Election and also saw the arrival of Greater Manchester and the Liverpool City Region’s first metro mayors. As we approach the end of the year, we ask experts from a range of key sectors: What lies ahead for the North West in 2018?
region director, Institution of Civil Enginners (ICE) in the North West
2018 will be a key year for infrastructure in the North, both in the sector and in political terms. There should be further devolution to give the metro mayors and combined authorities more power, and they should work with Transport for the North and other bodies to encourage investment, both public and private.
Government must have confidence to keep investing in crucial projects to connect all of the Northern Powerhouse, and rebalance decades of underspending on roads and rail by allowing innovative funding sources.
As detailed in ICE’s recent report, a northern infrastructure strategy is required to tie this all together to identify priorities – including crucial aspects such as energy, digital, transport and skills – so that there’s one voice to government on the requirements, to ensure we improve the lives of all of us that live and work in the North.
co-founder and director, Emanuel Oliver
Generally the market for retail is still difficult although there has been a slight increase in retail enquiries this year. Going forward we expect this slow improvement to continue, although this could change quickly dependent on Brexit announcements but perhaps more importantly, an increase in interest rates which could affect demand from start-up retailers.
Business rates continue to be a problem although rates payable have generally fallen across the North, particularly in non-metropolitan areas where this has been by up to 40% down in some towns.
Unfortunately, due to the transitional phasing arrangements in place, the full reduction in rates payable won’t be received by occupiers for another four years but this has helped to increase demand for vacant space in a small way and will continue to do so into 2018. In Wales, where there’s no transitional phasing, the reductions in rates payable for occupiers was immediate and this has helped with occupiers’ ability to afford to open shops.
The restaurant market appears to have peaked and we expect this to plateau into 2018. However, there are a number of expanding fast food/grab and go occupiers including Krispy Kreme, Warrens Bakery and Taco Bell looking to take additional shops.
On the whole, interest is improving from smaller retailers but the larger chains continue to focus on the top 100 centres. This is a structural shift that’s likely to be permanent.
“The restaurant market appears to have peaked and we expect this to plateau in 2018. However, there are a number of expanding fast food occupiers.”
talent and skills lead, Tech North
I’m really excited about the Co-op’s new Federation House building in Manchester. One of the city’s oldest brands is today bringing together the brightest and best from across the North West to build a community powered by digital, built on cooperative values.
That means any companies joining the space have to sign up to a pledge saying they operate fairly – an idea that I believe could give the North West an edge over other global tech clusters if it were adopted widely.
I also finally feel like ‘skills’ and ‘diversity’ are making it towards the top of the agenda, not least because of a £2 million funding boost from the Greater Manchester mayor.
We’re seeing companies like coding bootcamp North Coders, diversity focused Liverpool Girl Geeks and refugee trainer Code Your Future going from strength to strength. They’re all trying to ensure the North West becomes the world’s most inclusive tech workforce and are all now residing in Federation House too.
director of office agency, JLL North West
The short supply of quality Grade A office space will be the biggest challenge next year. In Manchester, for example, the record-breaking level of take-up we first saw in 2015, which has since been maintained, could be effected due to the lack of new build schemes set to be delivered in 2018.
Demand is showing no sign of dropping. There’s a growing interest in good quality city centre space in Manchester, particularly from tech companies which are moving from out-of-town locations to help attract and retain top talent. Likewise, demand will continue to be buoyed by the continuing trend of London-based occupiers ‘north shoring’ and moving certain operations into the North West.
The delivery of good quality refurbished city centre stock, like at 11 Portland Street and NOMA’s Hanover, will be crucial in capturing demand while we wait for schemes like the 116,000 sq ft One Two Five Deansgate to be delivered in 2019.
regional director, Muse Developments
2018 will see more major transport projects to improve connectivity and ease congestion, e.g. Metrolink, smart motorways, rail electrification and the linking of Manchester Victoria and Piccadilly via Ordsall Chord. Regeneration will be focussed around key transport interchanges for accessibility and links between businesses and skilled labour pools.
There’ll continue to be a strategic focus on housing and tackling the homes shortage with emphasis on affordable homes, but also private market sale and PRS where there remains untapped demand in regional towns and cities. Allocation of the government’s Housing Infrastructure Fund will unlock key residential opportunities for early development.
Major town centre schemes are being brought forward in Warrington, Preston, Bolton, Bury, Oldham and Stockport. Regeneration will be driven by strong public/private partnerships and local authorities will help drive projects by becoming investors or occupiers in their own town centres.
Sustainability will become even more important as schemes are increasingly designed for people not cars, and the congestion charging debate will begin to re-emerge.
development manager, Federation of Small Businesses (FSB) in Merseyside, West Cheshire and Wigan
Many things will impact on Nort West SMEs in 2018 but three stand out: devolution, Brexit and the International Business Festival.
Steve Rotheram and Andy Burnham, the metro mayors for the Liverpool City Region and Greater Manchester respectively, are passionate about spearheading the Northern Powerhouse and this region’s prosperity. They’re also firm allies and, probably for the first time, we have a genuine commitment for collaboration between our two great cities.
There’s been a frustrating lack of progress in the Brexit negotiations. FSB will continue to lobby for the rights of EU citizens working in the UK which are so important to our small firms, for a real transition period allowing businesses to adjust and much more. We’re at a crucial stage – the government must get it right.
The UK must also take advantage of emerging opportunities globally. The International Business Festival will return to Liverpool in summer 2018. It’ll be the biggest showcase of UK business to international investors in the world and there’ll be many opportunities for small firms to begin or develop their journey into international trade.