Coronavirus & The Economy – How is it affected?
The ongoing economic effects of the pandemic are continued to be felt by UK businesses as we enter the final stretch of 2020, and the challenges they are experiencing are significantly impacting a number of industries and sectors.
Some employers are facing up to having to close their doors a second time to their customers as parts of the UK enter extended lockdown measures, whilst others have had to invest in digital solutions to allow their employees to continue to work from home.
Despite the government providing support measures to help businesses continue to operate through the coronavirus, such as the Job Retention Scheme, the national GDP is still down by 20.4% this year, the largest decline since records began.
Here we explore which industries and sectors are feeling the effects of COVID 19 the most.
Manufacturing industries see 18.4% drop in overall production
The coronavirus pandemic has already brought many challenges to the country’s manufacturing industry, especially for companies that depend on workers whose roles cannot be undertaken remotely. Whilst other industries have shutdown throughout the pandemic, the manufacturing sector remains open.
However, to keep production running, manufacturing companies have been forced to change the way they operate on sites and find more efficient ways of delivering their products and services. Coupled with the challenges preparing for Brexit has thrown at the industry, most of the manufacturing industries in the UK remain well below their February 2020 output levels.
Industries such as the manufacture of motor vehicles, aircraft and ships have seen drops of over 32.1% to their production levels. However, some industries have seen a slight increase, with the manufacturing output of pharmaceutical-related products having risen by 10.1%.
Over 125,000 UK retail jobs lost so far this year due to COVID 19
The continued measures introduced by the government continue to put a massive strain on the retail industry, as many are having to combat complex global supply issues, and even question if they should continue to operate with such low demand for their products. This month alone has seen the collapse of established high street retailers such as Debenhams and the Arcadia Group, that includes Topshop and Burton Menswear, putting another 37,000 workers at significant risk of redundancy.
Even retailers that have managed to stay afloat have been forced into making huge cuts to their workforces. Despite the government’s furlough scheme made available to businesses, introduced to help protect jobs during the pandemic, the number of job losses is 31.5% higher when compared to the same period in 2019.
With walk-in customers dropping to near non-existent levels, retailers have had to focus their efforts into their online services, and many were not fully prepared for the challenges this brought. However, many now realise that having an online presence allows them to reach new audiences and not rely on major marketplaces like Amazon or Etsy.
87.7% drop in Travel agency and tour operator activities
Few industries have been hit harder than the Travel and Tourism sector. Since the first case of COVID 19 was reported at the end of 2019, the virus has spread to nearly every tourist hotspot of the planet, resulting in millions of cancelled flights, closure of museums, bars, restaurants, and governments of countries around the world closing their borders to outside visitors.
Workers in the industry have found this equally as punishing, as many have had to hand back their hard-earned commission amid global travel restrictions and cancelled holidays. Experts predict January sales to be at just 40% of usual levels. The drop in sales and the uncertainty of what future measures will continue to be in place to stop the virus from spreading has left tens of thousands of travel agency staff out of work or facing redundancy.
The government is continuing to consider two-stage airport Covid-19 testing and reducing the number of days required to self-isolate upon return from high-risk countries as an alternative to current 14-day quarantine, which they hope will support efforts to boost the sector.
If you cannot work because of the Covid-19 pandemic, there are various schemes and support services available to ensure that you receive the financial help that you need.
If your employer has no work for you, or can only offer you reduced hours, they can put you on furlough. This means that your employer receives 80% of your wages from the government, allowing them to continue paying their staff even when work has been limited.
The furlough scheme has been running since March 2020 and has been especially helpful to those in the hospitality industry that has been unable to stay open due to restrictions.
If you have lost your job entirely due to Covid-19, you may be entitled to government benefits such as Universal Credit, New Style Job-Seekers allowance, and Pension credit. You can find all the information about eligibility on the government website.
Finally, if you cannot go into work because you, or a family member, have been asked to self-isolate, you may be eligible for a Test and Trace Support Payment from the local council. This payment is to support low-income workers who will be significantly financially affected by a period off work due to test and trace.
Right now, there are no clear figures for the exact amount of people that have lost their jobs as a result of the covid-19 pandemic, and it may be a long time until we do. However, we can measure the unemployment rate which calculates the percentage of people that are out of work and actively looking for employment. The last recorded result was for August-October 2020, which was calculated at 4.9%, a 0.7% increase from the previous three months. This figure equates to around 1.69 million people out of work.
This figure is expected to increase as we see the results of the second national lockdown and the economic impact of the winter months ahead.