GC SITUATION REPORT AND BUSINESS SURVEY RESULTS
UK Economic Performance
UK economy continues to show resilience, with GDP growth strengthening to 0.4% in July 2026 and annual growth rising to 1.6%. Growth is being supported by stronger services activity, modest increases in production and construction output, and relatively stable consumer spending, although business and consumer confidence remain sensitive to global economic conditions.
However, risks to the outlook have increased due to escalating tensions in the Middle East, which have driven higher oil prices and added uncertainty to energy markets. Rising energy costs could place further pressure on inflation, potentially delaying interest rate cuts and increasing costs for businesses and households. While the economy remains on a stable footing, persistent energy market disruption could weigh on confidence and growth prospects through late 2026 and into 2027.
Survey Summary
Greater Manchester business confidence remained stable in August 2026, with the GC Business Confidence Index holding at 7.5/10 and overall trading conditions showing little change. While only 14% of firms reported increased sales over the previous 12 weeks, sentiment remains positive, with 65% expecting profits to rise over the next year and just 2% anticipating a decline. Investment intentions also remain strong, with businesses continuing to increase capital expenditure, workforce development and innovation activity. Confidence is particularly high across Retail, Tourism, Education, Healthcare, Manufacturing and Engineering sectors, while AI adoption remains at a record 59%, highlighting continued business focus on productivity and digital transformation.
Despite positive sentiment, firms continue to face economic pressures. Rising costs remain the most significant challenge, affecting 27% of businesses, followed by cashflow concerns, recruitment difficulties and supply chain issues. Insolvency risks increased during August, with the number of firms displaying financial warning signs rising notably and the proportion of Greater Manchester businesses with red flag ratings continuing to exceed the national trend. Growth and market expansion remain key priorities, with over half of firms identifying access to new domestic sales opportunities as their primary challenge. Demand for support in business planning and sales and marketing has increased, while workforce capability remains a concern, as fewer than four in ten businesses believe employee skills are fully aligned with business objectives.
Key Findings
GC Business Confidence Index (GC-BCI): Business confidence for August 2026 stood at 7.5 out of 10,(unchanged). Confidence levels are above average Manufacturing and Engineering, Construction, Education, Hospitality, Retail, Tourism and Healthcare and lower in BFPS,DCTs and Utilities/LCEGs.
Investment: 39% (vs 41%) of firms expect to increase capital expenditure in the year ahead. Sectors most optimistic about increasing investment are Utilities / LCEGs, Manufacturing & Engineering, Retail Hospitality, and Other Services; and lowest in BFPS, DCTs, Education, Construction, and Healthcare.
Cashflow Issues: 18% (unchanged) of firms reported cashflow problems and higher risk reported in Retail, Tourism, Healthcare, and Other Services.
Trade: 25% of firms (unchanged) export goods/services, with 19% (vs 18%) expanding into new markets, a trend particularly notable in the Utilities/LCEGs, Manufacturing, Retail, and DCTs sectors.
Future Support Needs: Business planning 42% (vs 39%), Sales & marketing 39% (vs 37%), Innovation 35% (unchanged), Training 31% (unchanged) and Financial advice 33% (unchanged).
Recruitment and Skills: 29% (unchanged) of firms recruiting; higher among SMEs; most active in Construction, Tourism, BFPS, Manufacturing, and Other Services; Sectors least likely to be recruiting are DCTs, Engineering, Education and Healthcare.
Archived Reports
For more information on this survey, please contact
Sabirah.Chowdhury@growthco.uk