West Midlands Weekly Economic Impact Monitor – 30th October 2020

Published: Posted on

The context this week is one of rising infections across Europe and national and local restrictions and lockdowns. The Job Retention Scheme is ending this week and is replaced by a new scheme that aims to protect viable jobs in businesses facing lower demand over the next six months. Concerns about unemployment and redundancy continue.

Key issues
  • Infections are surging in Europe and the USA. There are local and national lockdowns in various parts of Europe. A short, sharp firebreak has been introduced across Wales. In England, infection rates are now rising across all age groups. In the West Midlands region, Dudley and Staffordshire are due to enter Tier 2 restrictions, with Coventry and Stoke-on-Trent being the most recent entrants in this region to Tier 2. The UK has recorded its highest death toll since the first wave.
  • The Coronavirus Job Retention Scheme ends this week (on 31 October) to be replaced by the Job Support Scheme which will run from 1 November for six months. The aim is to protect viable jobs in businesses facing lower demand over the winter months. Employees must work at least 20% of their hours to qualify, with employers and Government sharing the wage bill. The scheme ensures employees earn a minimum of 73% of their normal wages. Where a business is required to close its premises due to national or local Coronavirus restrictions the Job Support Scheme will apply.
  • The WMCA 3 LEP area had 205,500 employments furloughed on 31 August. This was 11.3% of eligible employments for the scheme. The local authorities with the highest percentage of workers furloughed on 31 August were Solihull with 12.8% (12,600), followed by Stratford-on-Avon and Birmingham both with 12.4% (5,100 and 55,400, respectively).
  • Across the WMCA 3 LEP area, there were 173,200 of the population eligible for the Self-Employment Income Support Scheme (SEISS). There were 119,100 claims made to 30 September, which equates to values of £284.6m or on average nearly £2,500 per claim. The take-up rate for the WMCA 3 LEP area was 69%, above the UK average of 67%.n total, the.
  • A Jobs, Jobs, Jobs report from the Resolution Foundation analyses how the labour market situation has evolved over the pandemic. It is largely based on an analysis of 6,061 adults aged 18-65 surveyed on 17-22 September. Key points include that previously furloughed 18-24 year olds, BAME workers and the low paid were most likely to have lost jobs, the employment effects of the crisis have hit London especially hard, and the self-employed are hard hit with more than half of self-employed workers receiving lower earnings than before the crisis.
  • There is little sign that workers are reallocating to less affected sectors of the economy.
  • The majority of the rise in unemployment is accounted for by lower than normal flows into work – highlighting the importance of looking at labour market flows and underscoring the difficulties facing those searching for work.
  • Across sectors, the availability of funding and finance to support investment required to adapt to the Covid crisis is an issue for some businesses. Many are concerned about potentially having to shut down in a new lockdown.
  • With regard to Brexit, some companies report that they are still in ‘crisis management’ mode and so have not had the opportunity to properly consider preparations for the end of the transition period.
  • Businesses are looking for support in handling redundancies from HR service providers.
  • On a positive note, there is a good pipeline of investment projects emerging in various sectors. There has also been an increase in enquiries from businesses looking to upskill their staff as they seek to adapt their businesses to new market opportunities and conditions.
  • In the West Midlands, online job adverts increased from 73.6% (9 October) to 77.3% (16 October) of the 2019 average. This is above the national figures of 62.8% and 65.6% respectively for the two dates.
  • ONS Weekly Indicators show that for the West Midlands less than 1% of businesses have permanently ceased trading, 98.1% of businesses have been trading and 1.3% of businesses have temporarily closed or paused trading. 28.5% of responding West Midlands businesses reported that they were at no risk of insolvency. 49.6% of West Midlands businesses reported that they were at low risk and 8.3% at moderate risk of insolvency.
  • 20% of adults reported leaving the house to eat or drink at a restaurant, café, pub or bar this week (19% in a local lockdown area and 21% not in a local lockdown area). This is a decrease on last week (26%). 84% of adults said they often or always maintained social distancing; a slight increase from 82% the previous week.
  • 60% of adults travelled to work this week: a 5 percentage point decrease from the previous week. 25% of adults were working exclusively from home – the highest since the beginning of August.
  • Transport data from TFWM show a general reduction in travel over the last week. This includes half-term week where some reduction is expected. However, this may disguise a reduction in travel in line with Covid guidance.
  • The All-Party Parliamentary Group (APPG) on Housing and Social Mobility has published a report on ‘How to support social housing tenants into employment’. It highlights the role of social housing providers as employers, builders, deliverers of employment support programmes, partners and place-makers. It outlines the key role of social housing in addressing challenges of housing affordability and how they can support some of their residents who have been hard hit by job loss to link to new employment opportunities.
  • The Covid-19 crisis has had a major impact on childcare systems and structures that support parents. Childcare providers face challenges in getting their businesses back at a time of greater costs in providing a service that is in line with social distancing rules and requirements. The instability of the market poses problems for all concerned, highlighting the inter-related challenges facing working parents, childcare providers and employers.
  • Results of the Employer Skills Survey (ESS) 2019 have been released. The ESS is a large telephone survey asking questions about skills in short supply amongst applicants and training delivered. Data for the 3 LEP areas shows a local of necessary skills as the single most important obstacle to recruitment. In the Coventry and Warwickshire LEP and Greater Birmingham and Solihull LEP, recruitment is made more difficult by a lack of advanced IT, statistics and data science skills. A large portion of skill-shortage vacancies prove difficult to fill because of a lack of necessary social skills, notably teamwork and presentation skills. The survey reveals a fairly low level of awareness of the apprenticeship system.

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 Anne Green, Professor of Regional Economic Development, 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.

Sign up to our mailing list.

Leave a Reply

Your email address will not be published. Required fields are marked *