This week we see cases continuing to rise and the adjustment to Lockdown 2. In terms of wellbeing, nationally, people are feeling the least satisfied with life since March, they are suffering the largest drop in how they feel about the things they do in their lives, anxiety levels are on the rise and happiness is nearly as low as March.
- France and Italy have both reached the grim milestone of the highest daily coronavirus death tolls since April.
- The Paris region is close to reaching its ICU capacity, with 93.6% of intensive-care beds across France now occupied by Covid-19 patients.
- The European Union has reached a deal on the bloc’s long-term spending plans.
- Euro Stoxx 50 futures are pointing lower, despite gains in Asian markets amid record Singles’ Day online sales, indicating a more tempered and modest mood on the news of a vaccine.
- The European Union is set to impose tariffs on $4 billion of U.S. goods, which comes in to force this week.
- Capital Economics has revised its forecast for UK economic growth, upgrading its outlook noting the positivity around the roll-out of a vaccine.
- The West Midlands Business Activity Index has decreased from 58.5 in September to 51.2 in October.
- The West Midlands Export Climate Index increased from 52.3 in September to 52.9 in October. This is the strongest improvement in export opportunities since November 2018.
- Quarter on Quarter GDP analysis shows for the West Midlands region there was negative growth of 0.8% in 2019 Q4 and also negative growth of 3.5% in 2020 Q1. For the UK there was negative growth of 2.5% in 2020 Q1.
- The West Midlands Growth Company have estimated that the pandemic will reduce the size of West Midlands Combined Authority (WMCA) region’s visitor economy by £9.4bn (= £7bn directly + £2.4bn indirectly) and cost the equivalent of 102,256 full-time jobs in 2020.
- There were 115,080 unique job postings across the WMCA 3 Local Enterprise Partnership geography in October 2020, 13.3% higher than in September. This is the seventh consecutive month job postings have increased in the area.
- Across England and Wales, the overall registered death figure has increased from 10,739 in the week of the 23rd October to 10,887 in the week of 30th October. The number of deaths registered that state Coronavirus on the death certificate has also experienced an increase from 978 people to 1,379 people over the same period.
- For the week ending the 1st November 2020, overall footfall increased slightly to 68% of the 2019 level. The shopping centre index had the largest increase by four percentage points from the previous week and was 68% of the level seen for the same period in 2019.
- For West Midlands businesses that indicated they had sites which had paused or ceased trading –
- 51.6% stated they it was not financially viable to keep open.
- 39.8% were required to temporarily close due to lockdown regulations.
- 17.2% reported insufficient footfall of customer interest.
- 14.4% reported the reason as other and 2.3% were unsure.
- People were asked if they had worked from home in the last seven days. For the West Midlands, 25% said that they had worked from home, whilst 52% said they had not. A further 23% said they had not been able to work from home in this time period.
- Nationally, total online job adverts remained at 69.7% (of the 2019 average) in the week of the 30th October. Out of the 28 categories (excluding unknown), 12 had increased from the 23rd October with a 19.0pp increase in transport/logistics/warehouse to reach 175.4% of the 2019 level. In contrast, the largest drop was in education by 10.1pp to 77.2% of the 2019 level.
- Looking at a combination of risk factors or furlough, cash flow and Brexit, Business and Professional Financial Services, Advanced Manufacturing and Retail are the highest risk sectors for employment and overall GVA impact if they fail.
- Construction is potentially more at risk than previously thought when cash flow is taken into account, which could have implications for large infrastructure projects. The proliferation of sole traders in the supply chain creates the potential for multiple risks, labour supply issues and delivery risks to future projects.
- The cultural/visitor economy sector, which we already knew to be at risk, is significantly more at risk than all other sectors, due to furlough and cash flow. This is especially significant given the cash flow data is for companies who have not already ceased trading.
- The public sector or activities funded by the public sector will be the most resilient throughout the pandemic due to lack of consumer demand elsewhere in the economy, depending on government decisions on spending.
- Based on data from a selection of 15 attractions located across Birmingham and Warwickshire, the total number of visitors has dropped 89% from March to October 2020 compared with the same period last year. Further analysis shows that theatres saw the biggest decline of 96%, followed by heritage sites of 93%. Museums and family attractions suffered a 91% and 84% drop in visitor numbers respectively. The number of visitors to parks and gardens has dropped by 44% since the pandemic began in March.
- Although growing from a low base, the region is seeing significant increases in youth unemployment in places which have not experienced this effect in the past, such as Warwick and Stratford. This feature was seen in mass unemployment in the 1980s, where prosperous areas saw big relative increases. This may be an issue for those areas which have not dealt with youth unemployment for a long time and could cause pinch point issues in local support.
- For the West Midlands, 25% of respondents to the ONS survey said that they had worked from home, whilst 52% said they hadn’t. A further 23% said they hadn’t been able to work from home in this time period. West Midlands and East Midlands have the lowest levels of working from home and this is in stark contrast to London, where nearly 60% are working from home. This will be predominately due to the sectoral and occupational mix, but has bearing on the ability to lockdown and also reduce social contact.
- There were 210,975 claimants aged 16 years and over in the WMCA (3 LEP) area in October 2020, this is a decrease of 300 people when compared to September 2020. This is a 0.1% drop compared to an overall UK decrease of 1.6%. However, across the WMCA (3 LEP) area, compared to March 2020 (117,590) the number of claimants has increased by 93,385 (+79.4% compared to +105.9% UK).
- There were 43,660 youth claimants in the WMCA (3 LEP) area in October 2020, this is an increase of 470 people when compared to September 2020. This equates to an increase of 1.1%, while the UK decreased by 0.2%. However, across the WMCA (3 LEP) area, compared to March 2020 (22,835) the number of claimants has increased by 20,825 (+91.2% compared to +116.4% for the UK).
Labour Market Stats
- For the three months ending in September 2020, the West Midlands Region employment rate (aged 16 – 64 years) was 74.5% which has increased by 0.2pp from the previous quarter. The UK employment rate was 75.3%, a decrease of 0.6pp from the previous quarter.
- For the three months ending in September 2020, the highest employment rate within the UK was in the South East (78.3%) and the lowest was in Northern Ireland (70.5%).
- For the three months ending in September 2020, the West Midlands Region unemployment rate (aged 16 years and over) was 4.9%, which has increased by 0.3pp since the previous quarter. The UK unemployment rate was 4.8%, an increase of 0.7pp from the previous quarter.
- The highest unemployment rate in the UK for the three months ending September 2020 was in the North East (6.7%), with the lowest unemployment rate in Northern Ireland at 3.6%.
- For the three months ending in September 2020, the West Midlands Region economic inactivity rate (aged 16 – 64 years) was 21.5% – a decrease of 0.4pp from the previous quarter. The UK economic inactivity rate stood at 20.9%, remaining unchanged from the previous quarter.
- The highest economic inactivity rate in the UK for the three months ending September 2020 was in Northern Ireland (26.8%), with the lowest in the South East (18.1%).
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.