Manchester is one of the northern British cities struggling to close the north-south development gap inherited from the region's past reliance on manufacturing. It has become a financial, life sciences and computing centre. The government's Northern Powerhouse initiative includes grants and infrastructure projects for the region, for instance the high-speed HS2 rail line to Birmingham. Despite higher economic growth in the city, per-capita GDP and income is predicted to lag behind the UK average
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In 2016, labour productivity in the city was USD64,900 - 13% lower than in other parts of the country and 1.7% below the productivity in the UK excluding London. This was despite the highly productive business services sector accounting in Manchester for a greater share than in the UK excluding London (34% of total GVA in Manchester, versus 27% in the UK excluding London, in 2016).
Weaker labour productivity and higher unemployment in Manchester led to lower average household incomes in the city. In 2016, households in Manchester had on average 16% lower disposable income than those in the rest of the country (7.8% lower than in the UK excluding London).
Transport and housing excluded, average consumer expenditure per household in Manchester (USD28,900) was 21% smaller than the average in the rest of UK in 2016 (17% below the UK excluding London). Food and non-alcoholic beverages accounted for a larger share of total expenditure in 2016 (9.3% versus 8.0% in the UK excluding London) and also cost 8.1% more in actual terms. Spending on education was 32% lower than in the rest of the UK, and 20% lower compared to the UK excluding London.
Personal car ownership in Manchester was 21% below the UK average in 2016, contributing to 17% lower per household spending on transport in the city. In contrast, housing is expensive: 26% more expensive than the average in the UK not including London. Combined, housing and transport costs in Manchester were 3.1% below the average in the UK excluding London in 2016.