Prospects Rosy for Region despite All the Challenges; the Twice-Yearly Merseyside Economic Prospect Is Published Today by the Liverpool Macroeconomics Group. Economist and Prospect Editor Peter Stoney Examines the Outlook for the Region
Byline: Peter Stoney
THE prospects for economic growth on Merseyside and its neighbouring areas are still healthy, despite the challenges that are emerging for the rest of the UK.
Unemployment is lower than it has ever been and is close to full employment.
Of course there are many pockets of higher unemployment which suggest that there is still some spare labour capacity locally which could be absorbed in unskilled, intensive activities.
In this respect the region has an advantage over the South East where labour is hard to get.
Another advantage is the scope for urban regeneration which is now being exploited in the Capital of Culture programme. Yet a further advantage is the scope for the development of tourism and service industry. Hence one can say that the region's recovery is well under way after decades of difficulties, albeit and admittedly many self-imposed.
Provided growth in the UK as a whole does not collapse, which we regard as unlikely, these prospects remain assured.
Our forecasts and panel survey results for Merseyside and its hinterland of Cheshire plus North Wales exhibit the same pattern as previously. There is plenty of optimism everywhere, and not just in the statistics of growth and unemployment trends.
The transformation by Grosvenor of the retail centre of Liverpool is easily the most significant investment event of the last 50 years. These inner city works are mirrored in some of the peripheral districts such as Speke-Garston, St Helens, and Wirral. Cheshire's motorway linkages too have been influential in the county's above-average growth rate.
The dismal science of economics, however, sees investment benefits as associated invariably with business costs. These opportunity costs or shadow prices are twofold: first, the direct costs to business of the works themselves as in the case of lost retail business caused by the disruption of 'The Big Dig'; and second, the economic opportunities missed by carrying out the investment in particular ways and locations as in the case of the proposed pounds 200m investment in Merseytram Line 1.
It can be argued quite cogently that these opportunity costs have not been evaluated thoroughly enough on Merseyside. …