This week, further restrictions have been introduced nationally after sharp rises in infection rates, these include gatherings of no more than 6, and similar to places already in lockdown households cannot mix and there are stricter rules for venues. This is due to the pattern of infections being driven by socialising. Work and education are unaffected. Venues that fail to ensure that they are COVID secure can be closed or fined. Border forces will step up compliance with COVID-19 rules and tracing quarantine and there will be an introduction of people monitoring social distance in open spaces. The opening of events will be reviewed.
Main points are:
- The US has seen relatively strong job growth for August and a decline in unemployment, however, it is decelerating and might be a reflection of lag between activity and employment. Overall there are still 99.7m not in the workforce
- Japan’s economy is bouncing back with the highest monthly rate of growth on record (8%), but output remains low. But retail sales have fallen and consumer spending is failing to recover.
- Across the Eurozone retail sales are faltering; the volume of spending has returned but spending has stopped growing
- Sterling continued to slide for a second consecutive day yesterday as tensions over the UK’s trade talks with the EU persisted.
- UK firms are hiring temporary staff at the highest levels since 2018, as they need to recover from COVID-19 but fear the consequences of Brexit.
- As reported last week, the return to the office is slow goings and the City of London says the return to the office is low due to lack of confidence in public transport.
- Staycations and sales of home office equipment boosted UK spending in August.
- The CBI has highlighted that there are rays of light but tough times ahead, with the economy growing slowly at 2%. They have called for keeping unemployment as low as possible to minimise the long term impact on the economy. They have called for a more regional approach, especially when looking at access to capital, mirroring the approaches in France and Germany which are also long term. The CBI is calling for further and faster devolution.
- Knight Frank has launched an auction business to help clients sell homes faster during the heightened period of uncertainty caused by Coronavirus.
- The Department of International Trade (DIT) has announced new trade measures to help support consumer and retail businesses impacted by the coronavirus.
- The UK records its biggest jump in transport use since the start of the pandemic. Rail station footfall is up 12 per cent.
- Feedback on Kickstart Scheme is generally negative, particularly because of the 30 vacancies minimum.
- In terms of the pressure to get back to work, this is creating tensions between employers and employees and between businesses and the government stance.
- Manufacturing reveals a relatively positive picture: Defence remains strong, Automotive back up to 75% which is more reassuring, and there are some very positive examples of work.
- Brexit: businesses remain somewhat unprepared and feel there is not enough advice and guidance. However, support organisations find it difficult to give advice given the picture remains uncertain.
- ING think it’s unrealistic to expect a sudden plunge in GDP once the transition period ends. But whether there’s a deal or not, the change in UK-EU trade terms will push costs up for businesses in a range of sectors, potentially compounding the COVID-19 hit. That leaves the UK at risk of a slower and more turbulent recovery relative to its peers.
- Looking at the extent of workforce furlough, decrease in turnover and the size and importance of the sector in the region, the sector most at risk of significantly reducing in size and most at risk of not bringing workers back post furlough are Advanced Manufacturing and Engineering, Construction, Retail and the Cultural Economy (including sport).
- The sectors facing the least risk are Life Sciences and Health Care; Public Sector and Education.
- Sector facing medium risk are Business, Professional and Financial Services, Digital and Creative, Logistics and Transport Tech, Low Carbon and Environmental Tech.
The weekly monitor brings together data and intelligence from the WM REDI partnership into one single source which can be shared and utilised in planning and responding to the challenge of the virus. This is a rapid review of the issues. It is not intended to be a comprehensive assessment but rather a practical report which places emphasis on emerging issues and the best data and intelligence we have to date.
The monitor is feeding into the regional recovery planning that can help the regional economy bounce back and quickly move forward once lockdown restrictions start to be lifted.
The work is being endorsed by political and business leaders a task force of experts are being set up through WM REDI partners to better understand the impact of the lockdown and what measures will be needed to get the economy moving again.
City-REDI / WM REDI have developed a resource page with all of our analysis of the impact of Coronavirus (COVID-19) on the West Midlands and the UK. It includes previous editions of the West Midlands Weekly Economic Monitor, blogs and research on the economic and social impact of COVID-19. You can view that here.
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.
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