West of England Economic Briefing on Covid-19 Business Impacts - 9 July 2021
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West of England
Economic Briefing on
Covid-19 Business Impacts
9 July 2021
Responding to the economic impact of coronavirus
The West of England Combined Authority and Local Enterprise Partnership are working with partners across the region to support
residents and businesses through Covid-19.
Our focus is on rebuilding a strong and inclusive economy and enabling regional businesses to deliver sustainable clean and green
measures to improve quality of life for all in the West of England.
We have introduced a range of support measures to help businesses adapt to the new economic landscape and improve
resilience, as well as support for residents to develop new skills, training and employment opportunities. More information on
these support measures is available here.
The Regional Recovery Taskforce put together a Regional Recovery Plan to drive economic recovery. It outlined how we will
harness our region’s creativity and diversity to protect and secure jobs, while building back greener and creating opportunities
for all residents to share in the recovery.
This briefing summarises the Combined Authority’s analysis of the economic effects so far of the pandemic. It contains a mix of
regional and national data and uses fast indicators of current conditions where possible.
2
Updates this briefing
For ease of reference, this brief collates material from over the past few months. The key updates in this briefing are:
Section Updates Pages
A Overview: 4-6
§ UK GDP grew by 2.3% in April 2021, up to 4% below the pre-pandemic level.
§ Bank of England projections are for GDP to regain its December 2019 level by the end of 2021.
B Business activity: 7
§ Average total retail sales volumes for April and May 2021 combined were 7.7% higher than in March 2021.
§ Business confidence is at the highest level since at least 2017.
C Labour market: 8-10
§ 7.2% of the region’s workforce were estimated to be on furlough in May 2021.
§ 4.6% of the region’s workforce claimed out of work benefits in May 2021.
D Mobility: 11-14
§ Google Mobility data indicates that time spent at retail and recreation locations, on public transport and at
workplaces has stabilised following initial changes resulting from the step three easing of restrictions on 17 May 2021.
E Lockdown Roadmap 15-17
§ On 17 May, England moved onto step three of the roadmap. On 14 June, the government announced a delay on moving
to Step 4 of the roadmap until at least 19 July.
3
A. Overview: The economic impacts have been significant
§ UK monthly GDP was estimated to have grown by 2.3% in April 2021 compared to the previous month.
§ This brought output up to 4% below the level of February 2020.
§ Real UK GDP is currently at a level last seen in November 2016, and 1.2% above the level in October 2020 which was the initial
recovery peak.
UK monthly GDP was 3.8% smaller in April 2021 than in February 2020
105.0
Index: 2018=100
100.0
95.0
90.0
85.0
80.0
75.0
70.0
Aug 09
Aug 10
Aug 11
Aug 12
Aug 13
Aug 14
Aug 15
Aug 16
Aug 17
Aug 18
Aug 19
Aug 20
Dec 08
Dec 09
Dec 10
Dec 11
Dec 12
Dec 13
Dec 14
Dec 15
Dec 16
Dec 17
Dec 18
Dec 19
Dec 20
Apr 09
Apr 10
Apr 11
Apr 12
Apr 13
Apr 14
Apr 15
Apr 16
Apr 17
Apr 18
Apr 19
Apr 20
Apr-21
4
Source: ONS GDP estimates, April 2021
A. Overview: The recovery is uncertain – Bank of England
§ The below charts are projections of future GDP and unemployment from the Bank of England. GDP is expected to fall in the first
quarter of 2021 and then rise subsequently. Unemployment is also projected to rise in the near term before falling towards the
end of the year as spare capacity in the economy is reduced. The May 2021 forecasts are more optimistic than those made in
February 2021, reflecting the extension of the furlough scheme and stronger than expected GDP in Q1 2021.
§ These are fan charts, which show the projections based on the probability that the Bank of England think they will occur. This
reflects the uncertainty around the projection.
5
Source: Bank of England Monetary Policy Report, May 2021
A. Overview: Key sectors of the economy have been impacted
differently
The chart below shows the impact on Gross Value Added (GVA) in certain sectors of the economy at a UK level. Many sectors
have experienced a drop in economic output since February 2020, but some have been more adversely impacted than others. Two
of the three hardest hit sectors experienced an increase in activity after March 2021.
Monthly GVA change for various sectors from February 2020
120
100
80
60
40
20
0
2020 FEB 2020 MAR 2020 APR 2020 MAY 2020 JUN 2020 JUL 2020 AUG 2020 SEP 2020 OCT 2020 NOV 2020 DEC 2021 JAN 2021 FEB 2021 MAR 2021 APR
Wholesale, retail & motors Other services Accomodation & food
Financial & insurance Arts, entertainment & recreation Manufacturing
Construction Baseline
6
Source: ONS GDP estimates, April 2021
B. Business and consumer activity: Retail sales are higher and
business confidence is rising
§ Bank Search Consultancy data shows that new business start-ups in the West of England were 471 for April 2021 which
compares to 534 for the previous month, and 538 for February 2020.
§ Nationally, most businesses are trading again: 88% by late June, compared with 71% in January 2021. And in June, only 30% of
these firms said turnover was lower than normal, against 65% in June 2020. The proportions of businesses experiencing
challenges in importing and exporting are broadly unchanged since January 2021, with additional paperwork remaining the
top challenge faced by businesses for importing and exporting. (ONS Business Insights and Conditions Survey (BICS)
§ As restrictions have eased, retail sales have rebounded. Average sales were 8% higher in April and May than in March 2021,
and were 9% higher than in February 2020. After a sharp rise in April 2021, sales dipped by 1% in May, particularly for food
stores. Anecdotal evidence suggests the easing of hospitality restrictions had an impact on sales as people returned to eating
and drinking at locations such as restaurants and bars. (ONS estimates of retail sales)
§ The proportion of retail sales conducted online is falling but remains substantially higher than before the pandemic. The total
proportion of sales online fell to 29% in May, down from 30% in April 2021.
§ Business West’s Quarterly Economic Survey (Q1 2021) shows that business confidence across the South West is at the highest
level since at least 2017. Almost half of respondents are confident or very confident of the prospects of the UK economy for
the next 12 months and 68% are feeling confident or very confident in their own business potential over the same period. The
same survey also shows that for the first time since last year (Q1 2020), net domestic sales are positive. 42% of businesses
have seen their domestic sales increase quarter on quarter. In contrast, the UK export performance has improved but more
modestly.
7
C. Labour market: the level of furloughing is falling § By 31 May 2021, 7% of West of England employees were furloughed, 37,600 people. This is down from 10% in April and 13% in March. § Across the UK, 8% of employees were furloughed by 31 May 2021. § Based on claims made by 14 June 2021, an estimated 202,400 jobs have been supported by the Coronavirus Job Retention Scheme (furlough) in the region, cumulatively during the pandemic. § As of 6 June 2021, 151,600 claims have been made on the Self-Employment Income Support Scheme (SEISS) by West of England residents, amounting to £433.2m. The most recent, fourth, tranche of the SEISS accounted for 31,700 claims and amounted to £91.4m. Source: HMRC Coronavirus statistics; furlough figures are provisional. 8
C. Labour market: unemployment benefit claims are still
higher than before the pandemic but have declined slightly
§ The below table shows the number of people claiming out of work Other measures of unemployment data help give a wider picture:
benefits. Approximately 4.6% of the region’s workforce claimed out of
work benefits in May 2021 (34,095). This is lower than the figure for § The UK unemployment rate was estimated at 4.7% for February to April
England (6.2%). 2021, 0.8 percentage points higher than December 2019 to February 2020,
but 0.3 percentage points lower than the previous quarter.
§ An estimated 4.2% of the region’s population of 16-24 year olds
claimed out of work benefits in May 2021, which is below the figure § PAYE data shows that the number of employees on a payroll (seasonally
for England (6.7%). adjusted) in May 2021 in the UK is estimated to have fallen by 1.9%
(553,133 employees) since February 2020. When compared to April 2021 the
§ All four unitary authorities in the West of England saw a spike in the figure has increased by 0.7% (196,780 employees).
number of claimants in April and May 2020. This has appeared
relatively stable since, but there are now 18,325 more claimants in Working age residents claiming unemployment related
the West of England than there were in February 2020. benefits (%)
7
April April May May
6
2021 2021 2021 2021
5
% %
Number Number 4
workforce workforce
3
Bath and North East
4,970 4.0 4,645 3.7 2
Somerset
1
Bristol City 19,480 6.1 18,255 5.8 0
January March 2020 May 2020 July 2020 September November January March 2021 May 2021
North Somerset 5,630 4.5 5,195 4.2 2020 2020 2020 2021
South Gloucestershire 6,485 3.6 6,000 3.4 Bath and North East Somerset Bristol, City of
West of England Total 36,565 4.9 34,095 4.6 North Somerset South Gloucestershire
West of England England
9
Source: Nomis Labour Market Profile, PAYE Real Time Information, Labour market overview, UK (June 21)
C. Labour market: Vacancies and job adverts declined sharply
in April 2020 but have risen since
§ According to the Labour Insight job postings analysis tool, there was a slight increase in the level of postings advertised in the West
of England in May 2021 compared to April 2021. Job postings now exceed some of the levels seen before the pandemic. Job postings
levels and associated analytics are highly sensitive to the web-scraping tool used. Analysing trends rather than totals is therefore
advised.
§ Data from the ONS suggests that the number of job vacancies in the UK between March to May 2021 was 59% higher than it was a
year ago. Job vacancies have also nearly returned to levels seen before the pandemic.
Note: Any differences between the two datasets is likely in part due to different data collection methods and the type of data (total
job postings is a “flow” of new job postings, whilst the survey data is a “stocktake” of open vacancies).
Total job postings Seasonally adjusted vacancies (ONS Vacancy Survey)
West of England UK
v- 8
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10
Source: Labour Insight, Labour market overview, UK (June 21)D. Mobility: Retail and leisure activity has been impacted by
restrictions
§ Step three of the roadmap continues as step four has been delayed. However, some restrictions were still eased on 21 June. The
Google Mobility data shows that there was a recent spike in activity following step three of the roadmap. After this spike,
activity settled down around the second week of June.
§ Recovery of movement appears to be slower in Bristol than in the other local authority areas.
§ Data from the Broadmead Business Improvement District in Bristol suggests total footfall for May 2021 was 5% higher than the
previous month.
NB: Google Mobility data is missing for Bath & North East Somerset and North
Somerset at dates between August and September
11
Source: Google Community Mobility Reports (27 June), Footfall Report for Broadmead BID (May 2021).D. Retail and recreation recovery at a similar level in
2021 to 2020
§ This shows Google Mobility data for
Retail and recreation attendance from date of shops reopening - 2020 versus 2021 retail and recreation for each of the
four local authorities. It shows
activity as a percentage of a baseline
(100%) before Covid and uses a 7-day
rolling average.
§ Recovery was initially faster in 2021
than 2020 (partly reflecting
differences in when hospitality
reopened). Currently, activity is
similar to the comparable stage last
summer, and remains below pre-
Covid levels.
§ Some of the local authorities have
recovered more than others. The
recovery in North Somerset is
stronger than in Bristol.
NB: Week 1 of the 2020 recovery starts on 15
June and week 1 of the 2021 recovery starts on
12 April. These dates are when non-essential
retail was reopened.
NB: Gaps in the lines for 2020 are due to
Source: Google Community Mobility Reports (27 June). missing Google Mobility data. 12D. A slow return to workplaces, but slightly higher in 2021
than 2020
Workplace attendance from date of shops reopening - 2020 versus 2021 § This shows Google Mobility data
for the workplace for each of
the four local authorities. It
shows activity as a percentage
of a baseline (100%) before
Covid.
§ Workplace activity has remained
relatively flat and below pre-
Covid levels following an initial
recovery. For all four local
authorities, workplace activity
during the 2021 recovery is
above that for the 2020
recovery.
NB: Some of the dips in the data are the
days following a bank holiday weekend.
13
Source: Google Community Mobility Reports (27 June), excluding weekends and bank holidays.D. Mobility: Public transport usage in the region appears to be
slow to recover
§ Google Mobility data has shown an increasing trend at the end of May for the unitary authorities and the use of public transport.
This follows step three of the roadmap for easing restrictions on 17 May. However, this stabilised in the second week of June. This
also follows a similar trend to the other Google Mobility data.
§ Department for Transport (DfT) data shows that nationally, rail usage is around 46% of pre-pandemic levels and bus use (excluding
London) is around 64%. Average car usage in a week is currently around 96% of pre-pandemic levels. Please note that the
different modes of transportation use different baselines (more information can be found here).
NB: Google Mobility data is missing for Bath & North East Somerset, North
Somerset, and South Gloucestershire at dates between August and September
14
Source: Google Community Mobility Reports (27 June), DfT (Transport use during the COVID-19 pandemic)E. New lockdown easing roadmap for England
§ On Monday 22 February, the government published its roadmap for the easing of coronavirus lockdown restrictions.
§ The phased unlocking will occur at intervals of at least five weeks, and may be subject to change depending on infection
rates, vaccine uptake levels, or the emergence of new variants of concern.
§ On 17 May, England moved onto Step 3 of the roadmap.
§ On 14 June, the government announced a delay on moving to Step 4 of the roadmap until at least 19 July.
§ On 12 July, the government will announce whether or not step four will go ahead on 19 July.
Step 1(a) Step 1(b) Step 2 Step 3 Step 4
8 March 29 March No earlier than 12 April No earlier than 17 May 19 July
§ All schools reopen
Education § Practical Higher - - - -
Education courses
§ Exercise and § Rule of 6 or two § Maximum 30 people outdoors § No Legal Limit
recreation households § Rule of 6 or two households indoors
outdoors with one outdoors (subject to review)
Social Contact
other person or § No indoor mixing -
household
§ No indoor mixing
§ Wraparound care, § Organised outdoor § All retail § Indoor hospitality § Remaining businesses,
including sport, for sport § Personal care § Indoor entertainment & attractions including nightclubs
all children § Outdoor sport and § Libraries & Community Centres § Organised indoor sport
leisure facilities § Most outdoor attractions § Remaining accommodation
§ Outdoor § Indoor leisure & Gyms § Remaining outdoor entertainments
Business & Activities children’s § Self-contained accommodation (including performances)
activities § All children's activities
§ Outdoor parent & § Outdoor hospitality
child groups (up § Indoor parent & child groups (up
to 15 parents) to 15 parents)
§ Stay At Home § Minimise travel § Domestic overnight stays § Domestic overnight stays § Domestic overnight stays
Travel § No Holidays § No holidays (household only) § International travel (subject to § International travel
§ No international holidays review)
§ Funerals (30) § Funerals (30) § Significant life events (30) § No legal limit on life events
§ Weddings and § Weddings, Wakes, Receptions § Indoor events (1,000 or 50%) § Larger events
Events Wakes (6) - (15) § Outdoor seated events (10,000 or
§ Event pilots 25%)
§ Outdoor other events (4,000 or 50%)
15E. New lockdown easing roadmap for England
While the move to Step 4 was delayed, certain restrictions were eased from 21 June:
§ 30-person limit for weddings lifted
- 30 person limit was lifted from 21 June for wedding ceremonies, both indoors and outdoors
- Instead, capacity limits will be the highest number individual venues can accommodate while still
being Covid-secure
- Marquees on private land will need to have two sides open to qualify as “outdoors”
- The rule of six will still apply to weddings in private homes – except for deathbed weddings, which
can have up to 30 guests
§ 30-person limit for other commemorative events
- 30 person limit was lifted from 21 June for commemorative events including wakes
- Instead, capacity limits will be the highest number individual venues can accommodate while still
being Covid-secure
§ Visitation rules for care home residents have been relaxed
- Care home residents will no longer have to isolate after spending time away from home, including
overnight stays
- Residents will no longer have to isolate when they are first admitted to a home
- Residents will still have to isolate for 14 days following hospital visits
§ Vaccinations for all over-18s brought forward
- The government has brought forward its target to offer a first does of vaccine to all over-18s from 21
July 21 to 19 July
16E. New lockdown easing roadmap for England Listed below are the remaining restrictions currently still in place under Step 3 of the roadmap out of lockdown. Source: Government “Covid-19 Step 3 Restrictions” promotional materials 17
Contact us westofengland-ca.gov.uk economicanalysis@WestOfEngland-CA.gov.uk WestofEnglandCA West-of-England-Combined-Authority For further information on support available to businesses, visit the West of England Growth Hub: wearegrowth.co.uk
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