WM REDI has been tasked with providing an up to date monitor of the current COVID-19 economic impacts, on a weekly basis. These reports will help regional partners to shape responses and interventions to boost the region’s resilience so that it can thrive going forward. Each week the focus of the report relates to research and evidence published that week.
This week the region is facing the prospect of rising infections, as many areas are experiencing these, and the risk of local lockdowns. The A Level awards continue to create issues within colleges and universities. There is mixed performance this quarter for the region, but on the whole, as to be expected, it is generally on the downside. On a positive note business in the West Midlands continue to be more optimistic about the future and jobs and apprenticeship vacancies (available opportunities); although these are substantially down on previous performance, they continue to be the best performance of all Combined Authority areas.
- Infection rates appear to be rising in the region, with Birmingham rising substantially and restrictions being placed on care homes. Dr Justin Varney has raised fears that people have forgotten how serious the virus was and has warned Birmingham could face local lockdowns. The lockdowns in Greater Manchester have been continued.
- The housing market is being stimulated by Londoners seeking to escape the city after lockdown. House prices have hit unusual record highs in all seven regions, but a drop in London pulled down the national average to a 0.2% decline. The rush out of cities could get even stronger in the coming months homeworking becomes the norm for many UK businesses.
- The difficulty in reconciling individual fairness and a balanced distribution of grades in A Levels has led the Government to decide to drop the algorithm which Ofqual had used for estimating grades this year.
- Many universities with lower entry requirements may now have fewer students enrol as students may have made their firm university offer. As a result, these institutions could be left in a financially precarious position.
- A summary of evidence of people at most risk of not following government guidance to socially isolate is presented. Evidence is limited, but there is some evidence from the UK, supported by evidence from the US, that people least able and/or willing to self-isolate are younger adults, males and people of BAME heritage.
- A summary of evidence of strategies to support groups to socially isolate – Evidence is limited and in relation to the COVID-19 pandemic, is currently focussed mainly on the whole population, rather than population sub-groups. There is some evidence that for younger adults and for those not complying with social distancing, messages targeting the potential negative effect of not complying with social distancing might increase compliance and that highlighting the need to protect their families might be good strategies.
- Quarterly Economic Dashboard:
- The percentage of deaths from COVID-19 has dropped to 3%.
- Youth claimants stand at 43k and the WMCA is the 5th highest.
- All Claimants stands at 210k, 6.3% of the population and joint second highest Combined Authority.
- Business activity up to 61.9 the West Midlands is the highest region.
- Future business activity is at 75.2, which is the joint highest region.
- Foreign Direct Investment (FDI) – 130 projects in the West Midlands last year (latest figures) but still the highest region outside London.
- New FDI jobs are at 3558, 6% of new jobs and 4th highest region.
- Apprenticeship vacancies are at 1773, making WMCA the highest Combined Authority.
- Unique job postings 110,993, making WMCA the highest Combined Authority.
- The total number of furloughed 586,800, making WMCA highest Combined Authority.
- Quarterly GDP -1.6% lowest with East Midlands and South East.
- Quarterly FDI £30bn, -6.1% and now 4th highest region.
- Whilst many places, businesses and local authorities are still dealing with coronavirus, the government has released a Planning White Paper which looks to be centralising more power, with a lack of recognition of local economies.
- Overall footfall is continuing to increase and as of the 9th August 2020, it was around two-thirds of the 2019 level. There have been small increases across all locations, with retail parks still having the strongest footfall at around 85% of its level a year ago. High streets and shopping centres were around 60% of its level the same period a year ago.
- 5% of West Midlands businesses reported that operating costs exceeded turnover by at least 20% and 11.3% reported that turnover was equal to operating costs. While 49.6% of West Midlands businesses reported turnover exceeded operating costs by at least 20% and 25.5% of West Midlands businesses were unsure.
- 5% of West Midlands business have had to postpone or cancel bookings, services or events that have been sold to customers (32.1% UK) with 41.5% not having to cancel or postpone (41.4%), 20.7% reported this was not applicable (21.3% UK) and 7.3% of businesses were unsure (5.2% UK).
- 2% of exporting businesses in the West Midlands, and 42.8% in the UK, reported their businesses were still exporting but less than normal. 39.4% in the West Midlands were importing less than normal, compared to 35.9% across the UK.
- 9% of businesses in the West Midlands have received financial assistance from banks or building societies. Of these businesses, 77.3% reported this assistance helped them to continue trading, however, 19.3% reported there was no impact on their ability to continue trading.
- 81% of adults felt the most important issues facing Great Britain was the economy, followed by 75% with the Coronavirus pandemic and then 68% said employment. 37% identified the Coronavirus pandemic as the single most important issue facing Great Britain today.
- Nationally, total online job adverts in the week of the 7th August increased to 62% of the 2019 average. For the West Midlands, the total online jobs adverts have increased from 62.1% (31st July) to 73.0% (7th August) of its 2019 average.
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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