West of England Economic Briefing on Covid-19 Business Impacts - 6 August 2021 - West of England Combined Authority
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West of England
Economic Briefing on
Covid-19 Business Impacts
6 August 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 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 0.7% in May 2021, up to 3.2% below the pre-pandemic level.
§ The Bank of England projects GDP to get back to its 2019 Q4 level in 2021 Q4.
§ The three hardest sectors have experienced an increase in activity since March 2021.
B Business and consumer activity: 7
§ Retail sales volumes increased by 0.5% between May and June 2021, and were up 9.5% when compared with their pre-
pandemic February 2020 levels.
§ The proportion of retail sales conducted online is falling but remains substantially higher than before the pandemic.
C Labour market: 8-10
§ Furlough is falling. 5% of the region’s workforce were estimated to be on furlough in June 2021.
§ 4.2% of the region’s workforce claimed out of work benefits in June 2021.
§ Vacancies and job adverts now exceed pre-pandemic levels.
D Mobility: 11-14
§ Google Mobility data indicates that time spent at retail and recreation locations, on public transport and at
workplaces has not changed much following the step four easing of restrictions on 19 July 2021.
E Lockdown Roadmap 15-16
§ On 19 July, England moved to step four of the easing of restrictions roadmap.
3
A. Overview: The economic impacts have been significant
§ UK monthly GDP was estimated to have grown by 0.7% in May 2021 compared to the previous month.
§ This brought output up to 3.2% below the level of February 2020.
§ Real UK GDP is currently at a level last seen in March 2017, and 1.9% above the level in October 2020 which was the initial
recovery peak.
UK monthly GDP was 3.2% smaller in May 2021 than in February 2020
105.0
Index: 2018=100
100.0
95.0
90.0
85.0
80.0
75.0
70.0
Jan 09
Jan 10
Jan 11
Jan 12
Jan 13
Jan 14
Jan 15
Jan 16
Jan 17
Jan 18
Jan 19
Jan 20
Jan 21
May-21
May 09
May 10
May 11
May 12
May 13
May 14
May 15
May 16
May 17
May 18
May 19
May 20
Sep 09
Sep 10
Sep 11
Sep 12
Sep 13
Sep 14
Sep 15
Sep 16
Sep 17
Sep 18
Sep 19
Sep 20
4
Source: ONS GDP estimates, May 2021
A. Overview: Bank of England forecasts strong growth
§ The Bank of England projects that UK GDP will grow by 4% over the next year as the impact of Covid continues to dissipate and
activity is supported by government spending. GDP is projected to get back to its 2019 Q4 level in 2021 Q4, and subsequently the
pace of expansion eases.
§ Unemployment is falling, although the number of people in work is lower than it was before the pandemic. Unemployment is
projected to continue to fall.
§ There remains considerable uncertainty in these forecasts. These fan charts show the projections based on the probability that
the Bank of England think they will occur, reflecting the degree of uncertainty.
5
Source: Bank of England Monetary Policy Report, August 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. The
three hardest hit sectors have experienced an increase in activity since March 2021. This increase in activity is most noticeable in
the Accommodation & food sector.
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 2021 May
Wholesale, retail & motors Other services Accomodation & food Financial & insurance
Arts, entertainment & recreation Manufacturing Construction Baseline
6
Source: ONS GDP estimates, May 2021
B. Business and consumer activity: Retail sales are higher and the proportion of sales conducted online is falling § Bank Search Consultancy data shows that new business start-ups in the West of England were 416 for June 2021 which compares to 415 for the previous month, and 577 for February 2020. § The Red Flag Alert report from Begbies Traynor found that more than 46,000 firms in the South West found themselves in “significant” distress during Q2 2021. While that number was up by 16% on the same period in 2020, it represented a 10% drop from Q1 this year. (BusinessLive article) § Retail sales volumes increased by 0.5% between May and June 2021 and were up 9.5% when compared with their pre- pandemic February 2020 levels. The volume of sales for the three months to June 2021 was 12.2% higher than in the previous three months, driven in large part by particularly strong sales in April when non-essential retailing re-opened. Strong three- month growth was seen in non-food retailers and automotive fuel sales of 35.8% and 23.6% respectively. (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 26.7% in June 2021, down from 28.4% in May 2021. (ONS estimates of retail sales) § In the week to 24 July 2021, overall retail footfall in the UK was at 77% of the level seen in the equivalent week of 2019. (Economic activity and social change in the UK). § The percentage of businesses currently trading has remained broadly unchanged, from 89% in early July 2021 to 88% in late July 2021. (Business insights and impact on the UK economy) § The proportion of currently trading businesses that have exported and/or imported in the last 12 months and are experiencing a challenge remains stable- 54% for exporting challenges and 63% for importing challenges. The top two challenges faced by businesses are additional paperwork and change in transportation costs. (Business insights and impact on 7 the UK economy)
C. Labour market: the level of furlough is falling § By 30 June 2021, 5% of West of England employees were furloughed, 28,600 people. This is down from 7% in May and 10% in April. § Across the UK, 6% of employees were furloughed by 30 June 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 4.2% of the region’s workforce claimed out of § The UK unemployment rate was estimated at 4.8% for March to May 2021,
work benefits in June 2021 (34,095). This is lower than the figure for 0.9 percentage points higher than December 2019 to February 2020, but 0.2
England (5.8%). percentage points lower than the previous quarter.
§ An estimated 3.7% of the region’s population of 16-24 year olds § PAYE data shows that the number of employees on a payroll (seasonally
claimed out of work benefits in 2021, which is below the figure for adjusted) in June 2021 in the UK is estimated to have fallen by 0.7%
England (6.2%). (205,604 employees) since February 2020. When compared to May 2021 the
figure has increased by 1.3% (356,276 employees).
§ All four unitary authorities in the West of England saw a spike in the
number of claimants in April and May 2020. This has appeared
relatively stable since, although there has been a fall in claimants in Working age residents claiming unemployment related
recent months. There are now 15,310 more claimants in the West of benefits (%)
England than there were in February 2020. 7
6
May May June June
2021 2021 2021 2021 5
4
% %
Number Number 3
workforce workforce
2
Bath and North East
4,645 3.7 4,150 3.3 1
Somerset (BANES)
0
Bristol City 18,255 5.8 16,805 5.3 February April 2020 June 2020 August October December February April 2021 June 2021
2020 2020 2020 2020 2021
North Somerset 5,195 4.2 4,705 3.8
Bath and North East Somerset Bristol, City of
South Gloucestershire 6,000 3.4 5,425 3.0 North Somerset South Gloucestershire
West of England Total 34,095 4.6 31,085 4.2 West of England England
9
Source: Nomis Labour Market Profile, PAYE Real Time Information, Labour market overview, UK (July 21)
C. Labour market: Vacancies and job adverts declined sharply
in April 2020 but now exceed pre-pandemic levels
§ 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 June 2021 compared to May 2021. Job postings now exceed most 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 April to June 2021 was 154% higher than it was a
year ago. Job vacancies are now surpassing pre-pandemic levels.
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
May-Jul 2018
May-Jul 2019
May-Jul 2020
Dec-Feb 2019
Dec-Feb 2020
Dec-Feb 2021
Feb-Apr 2019
Feb-Apr 2020
Feb-Apr 2021
Jan-Mar 2019
Jan-Mar 2020
Jan-Mar 2021
Aug-Oct 2018
Aug-Oct 2019
Aug-Oct 2020
Jun-Aug 2018
Jun-Aug 2019
Jun-Aug 2020
Oct-Dec 2018
Nov-Jan 2019
Oct-Dec 2019
Nov-Jan 2020
Oct-Dec 2020
Nov-Jan 2021
Apr-Jun 2019
Apr-Jun 2020
Apr-Jun 2021
Jul-Sep 2018
Jul-Sep 2019
Jul-Sep 2020
Mar-May 2019
Mar-May 2020
Mar-May 2021
Sep-Nov 2018
Sep-Nov 2019
Sep-Nov 2020
c- 8
c- 9
c- 0
g- 8
g- 9
g- 0
21
Ap 018
Oc 018
Ap 019
Oc 019
Ap 020
Oc 020
Ap 021
Ju 018
Fe 018
Ju 019
Fe 019
Ju 020
Fe 020
Ju 021
D e 01
D e 01
D e 02
Au 01
Au 01
Au 02
20
2
2
2
2
2
2
2
2
t-2
2
t-2
2
t-2
2
2
2
2
2
2
2
b-
b-
b-
b-
r-
r-
r-
r-
n-
n-
n-
n-
Fe
10
Source: Labour Insight, Labour market overview, UK (July 21)D. Mobility: Retail and leisure activity is still below pre-
pandemic levels
§ England has now entered step four of the lockdown easing roadmap. 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 June 2021 was 11% 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 2020
11
Source: Google Community Mobility Reports (26 July), Footfall Report for Broadmead BID (June 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, except in North
Somerset.
§ 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 (26 July). 12
missing Google Mobility data.D. A slow return to workplaces, but slightly higher in 2021
than 2020 until very recently
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 was
above that for the 2020
recovery until very recently.
§ Changes in recent weeks may
reflect summer holidays
NB: Some of the dips in the data are the
days following a bank holiday weekend.
13
Source: Google Community Mobility Reports (26 July), 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. This stabilised in the second week of June. However,
North Somerset and South Gloucestershire have seen an increase in activity following the step four easing of restrictions on 19
July.
§ Department for Transport (DfT) data shows that nationally, rail usage is around 52% of pre-pandemic levels and bus use (excluding
London) is around 59%. Average car usage in a week is currently around 97% 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 Aug-Sept 2020
14
Source: Google Community Mobility Reports (26 July), 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 19 July, England officially moved to Step 4 of the roadmap
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 children’s § Indoor leisure & Gyms § Remaining outdoor entertainments
Business & Activities activities § Self-contained accommodation (including performances)
§ Outdoor parent & § All children's activities
child groups (up to § Outdoor hospitality
15 parents) § Indoor parent & child groups (up
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
§ On 19 July, England moved to Step 4 of the roadmap removing all legal mandates for the
wearing of face coverings, social distancing measures, and other coronavirus restrictions
§ While no longer compulsory, the public are advised to continue to wear face coverings on
public transport and in crowded public spaces
§ Working from home is no longer official government policy, but the government has advised a
staggered return to the office over the summer months
§ Businesses will be provided with updated guidance on how to understand and mitigate risks,
as we start to live with COVID-19.
§ A government campaign “Let’s keep life moving” has been launched to help raise awareness
of how individuals can continue to live safely with the virus during the pandemic
16Contact 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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