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 is based on research and evidence published that week.
- Nationally a gradual lifting of lockdown is underway with non-essential retailers able to open from 15th June (contingent on the Covid-19 situation). From August employers will have to pay a quarter of the wages of furloughed staff. There are reports that some large companies are seeking government bailouts.
- The Centre for Progressive Policy has developed a scenario on the scarring effect of recession. The analysis categorises local authorities into three groups – vulnerable, moderate and resilient – based on the size of the lockdown effect (reflecting sectoral structure), the time taken to recover from the 2008 recession, unemployment in 2019 and skill levels.
- Birmingham, Black Country local authorities, Tamworth and the Wyre Forest are categorised as vulnerable, while four are categorised as resilient: Bromsgrove, Lichfield, Malvern Hills and Warwick. Policy recommendations from the analysis include: reducing the risk of unemployment and incentivising good jobs; targeted and urgent investment in skills; tackling place-based inequalities in health; closing the investment gap between vulnerable and resilient areas and working together locally and nationally to reduce inequality.
- Research on small and medium-sized enterprises emphasises that problems with government support need to be addressed quickly. Innovation around business models is crucial to recovery but it is important to focus on individual resilience as well as business resilience. Analysis of the West Midlands Regional Entrepreneurship Ecosystem demonstrates that the weakest parts are around financing, innovation and skills. So financing prospects for potential entrepreneurs is an area of concern and investment in internationalisation is also a priority.
- With some schools set to reopen for some students from June, it is appropriate to reflect on the large literature indicating that school closures lead to slower progress or a reduction in learning outcomes for students. Despite moves to digital learning there remain concerns about disparities in access, with economically disadvantaged students most affected. There are also concerns about the development of skills that are more difficult to replicate online – including social and emotional skills that are prized by employers. Policy suggestions forwarded for overcoming educational disadvantage include extending vocational courses for young people by an additional year; greater flexibility in apprenticeships; extending maintenance loans and greater support for adult reskilling. Young people – especially those with no prior work experience – set to finish further education courses soon are likely to face particular challenges entering employment, with prospects set to be particularly limited for those taking courses in hospitality & catering, and in sports, leisure & recreation.
- The higher education sector faces considerable uncertainty. All universities are impacted but the Universities of Birmingham, Coventry and Warwick are especially exposed to a contraction in international students, with important implications for local economies, given the importance of student spending. Universities also face uncertainty about domestic recruitment. They have also lost income from commercial activities and rental accommodation.
Before the onset of COVID-19, the West Midlands region was in a period of significant growth, based on a burgeoning construction sector; a thriving city centre international business and professional services sector also driving high levels of business tourism; a manufacturing base becoming more productive and an automotive sector responding to the challenge of a carbon-neutral future; high exports, foreign direct investment and strong international links, and the biggest higher education cluster outside London. All powered by a young workforce. However, underlying this growth there were significant issues with inequality, poverty, youth unemployment, low skills, poor health and school performance.
COVID-19 could exacerbate our weaknesses and undermine our assets. This means we need to protect our assets and ensure they survive and then build their recovery on a resilient infrastructure, which encourages diversifying and supporting local growth, employment and supply chains. At the same time, we need to develop new ways of working internationally in a tech-based future.
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.
To sign up to our blog mailing list, please click here.