SPECIAL REPORT: How hard has Covid-19 hit the ecomony in your part of Warwickshire?
In these most unprecedented times, the economy has been slowed from both the supply and demand side, reports Warwickshire County Council graduate economist Emily Newport.
We have been focusing on trying to quantify some of the effects that may be felt on hard-hit sectors of the economy and key industries across the county. Through our analysis we have analysed the impact and expected impact on employment and output, measured using GVA.
The claimant count can be used as a proxy for unemployment, which is essential at a time when the usual data lag prevents us from seeing the true effect of COVID19. The latest claimant count shows there are an additional 17,500 Coventry & Warwickshire residents who are now claiming universal credit - over half of which are Warwickshire residents.
Source: Claimant Count, NOMIS, 2020
The expected impact on Coventry & Warwickshire’s employment is shown to affect some of the areas key sectors quite severely, with all but two industries expecting a decrease. This can be visualised in the below graph.
Source: ISER,2020; NOMIS, 2020; Warwickshire Economics, 2020
The impact of the lockdown is expected to have “removed” approximately 106,939 jobs from Coventry & Warwickshire’s economy approximating to 23% of total employment (albeit one hopes temporarily as a result of the Government’s Job Retention Scheme and the furloughing of employees). In particular, employees within retail businesses, accommodation and food, and manufacturing have been significantly affected, and these three sectors alone account for over two-thirds of all jobs affected.
Alongside employment, there will be impacts on the ability of businesses to continue to produce output and thus GVA. The graph below shows the overall expected GVA decline as a result of COVID19 impacts for all local authorities in the UK, ranked in order from most effected (1) to least effected (383).
Source: Office for Budget Responsibility, 2020; ONS, 2020; Warwickshire Economics, 2020
Source: Office for Budget Responsibility, 2020; ONS, 2020; Warwickshire Economics, 2020
Warwickshire County Council has responded pro-actively to the current economic crisis and we are now working with partners to develop an economic recovery plan [link to recovery story] as well as funding a number of short-term measures to support businesses and the economy.
It must also be remembered that in the decade that preceded this unprecedented pandemic crisis, Warwickshire was one of the fastest growing economies in the country, with very low levels of unemployment, high new business start-up rates, and a strong performer in
attracting inward investment. The inherent strengths of the Warwickshire economy remain, which should enable us to be well positioned as the economy starts to recover.