This week, the ONS published a review of the last 6 months, and the effect the pandemic has had on people. As time has gone on more people believe it will be more than a year before life returns to normal, the lockdown has raised anxiety and it remains above the levels pre-COVID, but happiness has levelled back to levels similar to that pre-COVID. We are seeing cases rising across the EU and increasing restrictions in the UK, as the government balances health and the economy.
Key issues:
- Infection rates have grown across Europe. And there is clear evidence of an increase in people testing positive, but compared to other regions the West Midlands is showing a smaller increase. Hospital admissions are also rising, with a small rise in deaths so far.
- The recent resurgence of the virus in Europe is taking a toll on the service sector, flash PMI for output at the European level at a 3 month low to 47.6 signalling contraction, whereas manufacturing is at a 31 month high.
- House prices in the month of September have risen at their fastest pace in four years. The housing market continues to defy the downturn and uncertainty elsewhere in the economy. According to the Nationwide House Price Index Property values increased by 5 per cent in the year to September.
- Revised Q2 GDP data shows the fall in GDP was slightly less pronounced than originally expected.
- Latest UK business data (still pre-COVID) shows there were 151k enterprises in the WMCA area an increase of 4.5% on the previous year, with 2.5% with turnover over £5m (higher than the UK) and also higher levels (7.4%) of companies with a turnover between £1m and £4.9m. We have yet to see how these figures will be affected by the pandemic.
- Since government advice was reintroduced asking people to work from home where able, the road network has experienced a slight shrinkage in demand. The Metro is operating a full service with patronage at around 75%.
- For the week ending the 20th September, the overall UK footfall remains similar to for the week starting 7th September 2020 which was around 72% of the 2019 level. Although, the latest weekend figures show footfall has increased for high streets and shopping centres. 23.4% of West Midlands businesses reported in the last two weeks that footfall had decreased when compared to normal expectations for the time of the year.
- Less than 1% of UK businesses reported they have permanently ceased trading with 2.7% temporarily closed or paused trading and 96.5% continuing to trade.
- 2% of West Midlands businesses reported that operating costs exceeded turnover by at least 20% (UK 13.5%) and 9.0% reported that turnover was equal to operating costs (UK 11.9%). While 56.1% of West Midlands businesses reported turnover exceeded operating costs by at least 20%.
- 6% of West Midlands businesses reported an increase in demand for goods or services sold in the last two weeks; 62.2% reported no increase (65.4% UK).
- For the West Midlands region, the total online jobs adverts increased from 59.8% (11th September) to 61.8% (18th September) of its 2019 average.
ONS – A Diary of a Nation:
- The proportion of people who thought it would be more than a year before life returns to normal increased through the lockdown.
- Levels of anxiety and happiness saw the greatest change when the lockdown was introduced, compared with pre-pandemic levels.
- Worry about the future was the factor receiving most comments regarding the impact on people’s well-being during the pandemic.
- 87% of parents said they had home-schooled children, but only half of adults felt confident in their abilities, 43% said it was negatively affecting their child’s wellbeing and 36% said it was putting a strain on their relationship. By mid-June, 60% said children were struggling to continue their education at home.
- The number of people meeting up with others and visiting pubs or restaurants rose throughout the summer. Visiting pubs and restaurants rose nearly 30% (from only 10%) from mid-July to September.
- More people reported having worn face coverings in public places following regulations being introduced. Up to nearly 100% stated they have worn them outside by the end of August.
- Over half of working adults were travelling to work by the end of August. Home only working has dropped to 20%.
- 58% of parents said they were either very or somewhat worried about children returning school or college.
- In late August the coronavirus pandemic was seen by a third of people as the most important issue facing Britain, followed by the economy.
Brexit
- A recent conference in the region on Brexit has highlighted that manufacturing is likely to be the sector hardest hit. This is a key concern for the West Midlands. The impacts will vary across different subsectors based on a range of different impacts.
- Even in the event of a deal being agreed the added burden of bureaucracy such as proof of identity of parts will increase costs for businesses and threaten just in time delivery.
- 9% of the service sector’s GDP is also at risk in the Midlands.
- Brexit is likely to have a bigger impact on GDP than the pandemic; a vaccine will to some extent reverse the pandemic impact but Brexit is a structural change. The combination of the two is seen as a toxic combination with distinct impacts interacting.
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 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.
This blog was written by Rebecca Riley, Business Development Director, City-REDI / WM REDI, University of Birmingham.
Disclaimer:
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.