Where is all of Manchester’s new wealth going?

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Earlier this month, I wrote a piece for The Mill in which I made a bold claim. After decades of hype, Manchester was starting to resemble something extremely rare in the UK – an actual economic success story outside the orbit of London. Productivity, one of the single most important economic indicators, was on the up, despite flatlining across the rest of Britain. Given that some economists estimate that lost productivity growth has cost each of us £10,200 a year, this seems like a big deal.

The piece sparked a great and ongoing debate about why this change was happening. Was it the increased retention of graduates from the suction engine of Manchester’s vast universities? Was it major office developments like Spinningfields changing the nature of what kind of work was done in Manchester? Was it, as I suggested, potentially the transformative impact of mass transit investment on our economy? All of the above?

Unfortunately, I haven’t definitively cracked the productivity riddle in the intervening weeks. But as several readers pointed out, important questions remain. Who is benefitting? Where is all that new wealth going? And will I manage to find a third W to round off my paragraph?

Where’s my pay rise?

Productivity, to recap, has nothing to do with how hard you work. It’s about how efficiently you are able to turn your work into economic value.

Increased productivity should translate into better wages for workers. But it’s worth saying that this isn’t necessarily the case; if firms have too much power, they can hold down wages even as productivity rises, appropriating the benefits into (in the best case) re-investment into the business, or (at worst) shareholder buy-backs and hefty CEO compensation packages.

Luckily, that doesn’t seem to be the case here. Total incomes in Greater Manchester are rising on the whole, with a notable increase over the last few years in line with the productivity boost in the 2010s that I documented in my first piece. This means more money is flowing around the local economy.

This feels about right. To use one more arcane bit of economic terminology – it passes the vibe check. In the six years I’ve lived here, Manchester has felt more and more like a city with a lot of cash flowing around. You can see it in the conspicuous consumption of high-end restaurants, or the proliferation of independent retailers serving tastefully muted button-down shirts and refurbished workwear.

Even the existence of this Manchester-based newsletter is another bit of evidence in favour of this point; unfortunately, local journalism is something of a luxury good in 2025, and while Joshi has yet to agree to let me crack open the Mill Media Inc databases, I don’t think it’s a coincidence that The Mill is the longest running and most successful of the new wave of local media outlets.

Luxury restaurants, independent retailers, upstanding local media outlets – all hallmarks of a particular kind of Greater Manchester resident. Yes, more money is being spent – but who is doing the spending?

Who benefits?

This is where things get interesting. At first glance, it looks like that productivity surge isn’t really showing up yet as increased wages for many local residents on a per-person basis. If we look at how these incomes translate into wages, ONS data tells us that the median Greater Manchester resident earned £34,553 last year. 

If your memories of GCSE maths are a little hazy, the important thing to remember is that the median is the exact middle – if you lined every resident of Greater Manchester up from lowest to highest earning, dead in the middle you would find someone earning £34,533. Of the 34 English counties with available data, Greater Manchester would rank 19^th. Respectable, but probably not anything to write home about.

But if you look at the mean, that being the mathematical average wage (which in GM is £41,706), Greater Manchester jumps 5 places up the ranking, to 14^th place. Because the mean is easily influenced by statistical extremes, that tells us something interesting; that higher incomes might be making up more of the growth in Greater Manchester.

There’s one more clue in this data. In 2024, median wages for Greater Manchester workers and residents were about the same. But mean wages for Greater Manchester workers were over £1,000 higher than mean wages for Greater Manchester residents. That suggests a significant chunk of the city’s income is flowing outside of the borders of Greater Manchester – and that those commuters are substantially better off than the average.  

And while this isn't necessarily a bad thing for the local economy, it does reduce the tax revenue available for Greater Manchester officials and leaders to invest in services. That's one reason some economists think Greater Manchester should expand – to cover prosperous commuter towns like Wilmslow, Buxton and Glossop.

Unfortunately, local data on who exactly is earning what gets pretty patchy, and I don’t want the Office for National Statistics on the phone, complaining about confidence intervals and breaches of personal information. But what we can do is look at where this income is going.

Show me the money (on a map)

Much of the increase in disposable income is materialising in the South of Greater Manchester, as the map below shows. Yes, there’s the much-hyped city centre and MediaCity there in dark green in the centre of the map. And as you might expect, incomes are rising in the well-connected leafier suburbs – Altrincham, Didsbury and the Heatons. But promisingly, they’re also rising more generally, in places like Moston, Levenshulme and Wythenshawe.

Where these benefits aren’t as obviously being felt for now are in the North of the conurbation. Greater Manchester’s own internal North-South divide is pretty well known but by way of a short recap; a combination of weaker public transport connectivity and lower educational attainment in the North of the city-region means that residents there don’t have equal access to opportunities in the centrally located service economy, while smaller manufacturing and goods-based firms in GM towns continue to face fierce competition from international competitors.

Is this divergence actually a bad thing? Some economists would argue growth in Altrincham can fund better public services in Middleton, and the important thing is that the growth happens at all. Others think we should be trying to shape economic growth so that more people in more places feel direct benefits. The mayor and city-region officials are pretty firmly in the latter camp – flagship Burnham projects like Atom Valley are intended to close the North-South gap by providing high-value jobs accessible to residents of the Northern towns.

As the Mill’s excellent long-form investigation from a couple of years back set out, we’ve got a long way to go before social mobility starts looking anything like London. There, strong investment in educational attainment, substantial social housing stocks, and a comprehensive public transport network, among other factors, mean that young Londoners have many more chances to realise their potential.

But amidst all the grim news about the national economy, my reading of the data – including rising productivity and rising incomes, including in areas you might not consider wildly affluent – is that we should take heart from what is happening here in Manchester. 

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If you have views on who is benefiting from Manchester's economic growth – or questions for James – please jump into the comments via the button below. When he’s not analysing productivity data for The Mill, James works for the leading economics consultancy Metro Dynamics.