West Midlands Weekly Economic Impact Monitor – 12th March 2021

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On Monday it was International Women’s day and it has been found that a year on from the onset of the Covid-19 pandemic, women have suffered the impacts more than their male counterparts. The Women’s Budget group released their ‘Women and employment during Covid-19 report’. The report found that:

  • Women are the majority of employees in industries with some of the highest Covid-19 job losses, including retail, accommodation and food services.
  • Overall, more women than men have been furloughed across the UK, and young women have been particularly impacted. Estimates for the end of January 2021 see a significant rise in furloughing as a result of the third national lockdown, reaching 2.32 million for women, and 2.18 million for men.
  • Black, Asian and Minority Ethnic (BAME) women began the pandemic with one of the lowest rates of employment. In 2020 this was still the case, with BAME women’s employment rate at 62.5% and the unemployment rate at 8.8% (compared with 4.5% for White people and 8.5% for BAME people overall). Between Q3 2019 and Q3 2020, the number of BAME women workers had fallen by 17%, compared to 1% for White women.
  • 46% of mothers who have been made redundant during the pandemic cite the lack of adequate childcare provision as the cause. 70% of women with caring responsibilities who requested furlough following school closures in 2021 had their request denied. This has led to almost half (48%) worried about negative treatment from an employer because of childcare responsibilities.
  • Employment for disabled people has fallen more rapidly during the crisis than for non-disabled people (1.9% compared with 1.1%) and disabled people are currently 2.5 times more likely to be out of work than non-disabled people.
  • During the first national lockdown, those in low-paid work were twice as likely to be on furlough, or have their hours reduced, as those in higher income jobs. This hit women particularly hard as there are twice as many women as men in the bottom 10% of earners.
  • By the end of 2020, 546,000 women had made Self-Employment Income Support Scheme (SEISS) claims (totalling £1.2 billion), compared with 1,376,000 men (totalling £4.2 billion). There was a clear gendered difference in the actual take-up rate, with only 51% of eligible women claiming, compared to 60% of eligible men.
  • The Office for National Statistics (ONS) highlights whilst more men died from COVID-19, women’s well-being was more negatively affected than men’s during the first year of the pandemic. Women have also consistently spent more time on unpaid childcare (women spent 99% more time on unpaid childcare than men and unpaid household work throughout the pandemic). While both men and women spent more time working from home throughout the pandemic, women did more unpaid household work than men. Women reported significantly higher anxiety than men at almost every point between 20 March 2020 and 7 February 2021, continuing the pre-pandemic trend.
  • The mental health of teenage girls and young women is now a serious health issue. This group has experienced a bigger fall in their mental health than any other.
  • In order to take on the increased burden of childcare, women have made sacrifices – opting for furlough or redundancy, reducing paid hours, taking holiday and unpaid leave, and giving up sleep to juggle around the clock.
  • Before the pandemic, older women (those aged 70 and above) enjoyed a relatively high level of mental health compared with the population as a whole. But they have experienced one of the biggest falls – far greater than among older men.
  • Women leaders typically reacted sooner than male leaders, locking down earlier, with the effect of reducing deaths. At a UK level out of 67 coronavirus briefings, 66 have been led by men.
  • EU research emphasises all these impacts. It also highlights a surge in domestic violence, with rates increasing by 20-30%.
Emerging Opportunities
  • In England, the percentage of people testing positive for the coronavirus (COVID-19) has continued to decrease. The Midlands has successfully continued to provide the most doses of the first jab and has remained the 3rd highest provider of the second dose out of the English regions.
  • UK footfall for the week to 27th February 2021 was at 43% of the level seen in the same week of the previous year, this increased by 5 percentage points when compared with the equivalent index in the previous week. Retail footfall performance was stronger in the West Midlands at 48% of the previous year.
  • The Organisation for Economic Co-operation and Development (OECD) analysis showed that last year the UK was the worst-hit economically out of the G7 group in 2020. However, the OECD has forecasted that due to the UK’s acceleration of the vaccine deployment, it is likely that the UK will see greater growth than most other countries. With the OECD predicting a 5.1% rise in real GDP growth for 2021 in the UK, the 2nd largest growth out of the G7 countries.
  • Danish toy giant Lego saw its fastest sales growth in five years, helped by families in lockdown purchasing bigger Lego sets to build as a family. It is expected that in the next couple of years the Lego Group will be employing hundreds of British computer game and website specialists.
  • According to ONS figures, a million people had left the country between the end of 2019 and the end of 2020. This would represent by far the largest annual fall in the resident population since the Second World War, with London especially hard hit.
  • HSBC UK has launched a new £600million fund for Birmingham SMEs this week. This is part of their broader plan of a lending fund of £15 billion aimed at supporting small businesses across the UK. The fund includes more than £10bn of specific regionally focused allocations. With the money being designed to support economies, employment opportunities and growth.
  • A controversial development in Birmingham by Eutopia Homes has won the backing of the Housing Secretary for its scheme of over 4.2 acres of industrial land at 193 Camp Hill in Digbeth.
  • Staffordshire County Council has announced a £2m loan fund launched to back small businesses in pandemic recovery. The fund will aim to support Staffordshire businesses that have failed to access financial support from commercial providers.
  • This week the Commonwealth Games committee have announced their tender process to find suppliers for venues across the city, with £5 million worth of catering contracts available for the 2022 Commonwealth Games.
  • The Higher Education Policy Institute has written a paper on which universities currently best support social mobility within England, and how this can be most effectively measured. Aston, Newman, Wolverhampton and Birmingham City Universities are all in the top 15 for social mobility, with others in the region making the top 40.
  • The West Midlands Business Activity Index increased from 41.5 in January to 51.1 in February. The growth reported was due to the clearing of backlogs, reduced uncertainty and projects in the pipeline. The overall UK Business Activity Index increased from 41.2 in January to 49.6 in February. Out of the twelve UK regions, the West Midlands region was the third highest for the Business Activity Index.
  • The West Midlands Future Activity Index registered at 76.1 as there was hope that the vaccination programme will control the spread of infections allowing restrictions to be uplifted and a recovery in demand. Although the overall level of positive sentiment fell slightly since January’s four-year high it still remained elevated.
Ongoing impacts
  • Multiplying the Business Insights and Conditions Survey (BICS) weighted furlough proportions by the Inter-Departmental Business Register (IDBR) total annual employment, preliminary figures show that 19% (approximately 6 million people) of businesses’ workforce were on furlough leave in mid-February 2021.
  • Nationally, between the 19th and 26th February, total online job adverts decreased by 3.4 percentage points. In the West Midlands, the total online jobs adverts decreased by 6.6 percentage points. The East Midlands had the highest decrease over this period by 7.4 percentage points.
  • There is emerging evidence that some companies are favouring taking on Kickstarters rather than recruiting apprentices. This has implications for the development of the talent pipeline going forward.
  • Amongst small businesses, key concerns include late payments, indebtedness – which is at significantly higher levels than formerly, and how debt will be treated by banks going forward. The latter is a particular concern for small businesses wishing to change banks.
  • There are ongoing challenges with importing and exporting. Some businesses are reporting exporting to the EU being very difficult with delays and extra costs incurred in shipping to the EU. Some businesses are reporting shifting from road to air freight, which could negatively impact the region’s logistics sector.
  • Some companies are expressing concerns about the settlement status of both their EU employees and potential new recruits who are EU citizens.
  • A survey on the British attitudes to inequalities shows embedded racism and meritocracy, with nearly a quarter of respondents thinking that if the incomes gap between ethnic minorities and white people grew, this would not be an issue.
  • The Institute for Government analyses funding problems in the current system, including more money given to Welsh and Scottish services and underspending in the West Midlands, and recommends greater transparency and a reassessment of the spending needs of each region.
  • The British Business Bank has released research that highlights 4 themes:
    • Businesses have shifted away from most traditional forms of external finance to utilise government-backed finance schemes and support.
    • Smaller businesses have faced a lot of uncertainty in 2020 – with the smallest businesses hardest hit.
    • As businesses continue to recover from the effects of the pandemic, there could be significant further demand for funding in 2021.
    • Due to record cash balances and increasing debt levels, there are both a sizeable number of smaller businesses in a position to borrow further in 2021 and a sizeable number likely to struggle with debt repayments.

Download and view a copy of the West Midlands Weekly Economic Monitor.

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 has 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.

This blog was written by Rebecca Riley, Business Development Director, City-REDI  / WM REDI, University of Birmingham.

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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