Greater Manchester should expand its city centre, improve connectivity across the city region, and build 126,000 more homes to boost its productivity, the Resolution Foundation says.

The think tank argues that optimism about the economic performance of the city region is ‘badly misplaced’ and that on current trends it is a century away from reducing its productivity gap with London to ‘a respectable margin’.

Greater Manchester has outperformed every other British city region bar Glasgow since 2002 in terms of productivity growth. However, there is still a 35% productivity gap with the capital that realistically should be closer to 20%, according to the Resolution Foundation.

The area’s output per worker also remains at £51,956—far below the UK average of £58,871—and it continues to have lower employment (72.9%), lower weekly pay (£515) and higher economic inactivity (24%) than the UK average, which stands at 75.4%, £533 and 21.7% respectively.

The Resolution Foundation argues that an economic strategy, which would include expanding the city centre to attract more knowledge-intensive firms in sectors like IT and insurance, improved transport connections, and thousands more houses, would boost productivity.

Lindsay Judge, research director at the Resolution Foundation, said: ‘Greater Manchester’s improved recent economic performance is well known. But “job done complacency” is badly misplaced.

‘The city is still at the foothills of fulfilling its economic potential, and on current trends almost a century away from reducing its productivity gap with London to a respectable margin.

‘Greater Manchester’s city centre is at the heart of its nascent recovery, but it remains too small to power the prosperity of the city as a whole.

‘Manchester’s recovery needs to be turbo-charged, not taken for granted, to boost the UK economy as a whole and raise living standards for the near three million across the city region.’