West Midlands Weekly Economic Impact Monitor – 31st July 2020

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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.

In general, furlough continues and there are ongoing concerns about redundancies. Local intelligence suggests a rise in employers thinking about redundancies (especially when furlough ends). This is also reflected in a rise in queries to business and professional services providers on legal and HR issues. There are calls for furlough extensions in the automotive and aerospace sectors.

  • Attempts to get people returning to work and out and spending are colliding with localised rises in coronavirus infections in several parts of the world and in the UK, raising fears of a second spike. The imposition of 14-day quarantine on travellers returning to the UK from Spain at the height of the holiday season has disrupted holiday plans for many.
  • There are ongoing concerns about challenges in planning for the future relationship with the EU. There is also the issue of upcoming changes in the UK internal market. Businesses do not have the energy, capacity or resources to prepare in the same way as they did for Brexit in 2019.
  • Women – particularly those from BAME groups – are on the frontline of the COVID-19 crisis. They comprise large proportions of health and care workers and also being concentrated in sectors and occupations vulnerable to precarity and poverty. Women in social grades D and E have been disproportionately impacted by furlough. Amongst parents mothers’ work time is more likely to be interrupted by caring responsibilities than fathers’ work time. Twice as many women surveyed in the West Midlands reported that their self-confidence had worsened rather than improved in recent months.
  • There are particular concerns about rising unemployment amongst young people. Large relative increases (albeit from a low base) in youth claimants have occurred in traditionally low unemployment areas (e.g. South Warwickshire). Apprenticeships, traineeships, T levels and Kickstart are all aimed at providing skills and experience for young people. Although central to the strategy to improve skills and jobs, apprenticeships have been heavily impacted by Covid-19. In the WMCA area, a third as many apprentices were recruited in 2020 up to April as in the previous two quarters. September-October is the peak time for apprenticeship starts and if recruitment then is muted we can expect a sharp year-on-year decline. Demand from employers is subdued: in June 2020 there were 5,624 apprenticeship job postings across the 3-LEP area, compared with 10,601 in June 2019. Apprenticeship postings are down more than all other job postings, indicating weaker demand from employers for apprenticeships.
  • There is a danger that young people who are most disadvantaged in the labour market will get pushed to the back of the queue for jobs. The Final Assessment of the National Lottery Talent Match programme (launched in the aftermath of the last recession) helping NEET young people towards employment was published earlier in July and it offers lessons for future initiatives. This voluntary programme delivered by local partnerships, and co-designed and co-delivered by young people, highlights that beneficiary involvement needs to be an integral part of future programmes to address youth worklessness. Talent Match was delivered via key workers using a person-centred approach. The programme had high reported levels of job satisfaction, improved well-being and a positive social benefit with at least £3.08 of public value generated for every £1 spent. Talent Match highlights the value of investment in coordinated and collaborative local youth employment partnerships.
  • The Social Mobility Commission has published a report ‘Moving Out to Move On’ investigating the link between internal migration in Britain, disadvantage and social mobility. Consideration of the relationship between geographical mobility and social mobility is timely given the likely impact of COVID-19 on accelerating existing international trends towards slowing geographical mobility within countries and concerns about a K-shaped recovery. Research suggests that limited spatial horizons can check social mobility, while over several decades career progression is enhanced by moves to London and the Greater South East: an ‘escalator region’ for social mobility – although the gap between the advantage of London over second-tier cities has narrowed. However, looking ahead Brexit and changes in immigration policy may mean fewer international migrants to fill jobs in London and the Greater South East in the short- and medium-term, opening up more opportunities there for internal migrants from elsewhere in Britain.
    • The young and highly educated have the greatest propensity to be geographically mobile and the Social Mobility Commission analysis reports that movers are more likely to be employed and to work at higher level managerial occupations. Better off people move to better-off areas, so compounding geographical disparities.
    • Moves to higher education are an important element of long-distance moves. Any reduction in higher education-related moves in the COVID-19 crisis has implications for longer-term mobility over the life course. Lower levels of geographical mobility may mean more stable communities, but may also mean less social mobility and entrenchment of spatial differences. It is hard to achieve social mobility in a depressed labour market. Universities and colleges need to work together to ensure a coherent offer for school leavers.
    • COVID-19 may accentuate the trend to more home working and less employment-related migration. This highlights the importance for regions and local areas of place attractiveness – both for attracting new people and retaining the existing population.
  • The West Midlands is participating in the MIT Regional Entrepreneurship and Acceleration Programme (REAP) to help aid economic recovery by deepening collective efforts and a community of practice focusing on innovation and entrepreneurship. Work is underway to develop regional measures of Innovation capacity (I-Cap) and Entrepreneurial capacity (E-Cap) encompassing human capital, funding, infrastructure, demand, and culture and incentives. Strengths of the West Midlands include a large university sector, business-led innovation, good connections to the UK and international markets and a range of sectoral strengths.
  • The COVID-19 crisis is having a significant direct impact on progress towards Sustainable Development Goals (SDGs), particularly the SDG for health and well-being. There are also indirect impacts on SDGs associated with ‘people’, ‘partnerships’ and ‘prosperity’. The digital divide, health accessibility, work security and social protection have been exposed by the Covid-19 crisis and are being re-thought to ensure development that brings inclusivity, sustainability and prosperity to all communities and places. OECD measurement tools enable the position of the West Midlands to be assessed alongside other regions

    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.

    Download and view a copy of the West Midlands Weekly Economic Monitor.

    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 Professor 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.

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