Overview of the Midlands (via Midlands Engine Economic Observatory)
The Nasdaq 100 index had its best gain in three months to close at a record high in July.
The lockdown and stay-at-home order drove a rise in the FAANG group of megacap technology companies (Facebook, Amazon, Alphabet, Apple and Netflix) while Zoom Video Communications Inc. also gained.
The main beneficiaries of the lockdown have been technology companies, evident in the recent gains made by such tech companies on the stock markets.
Andy Haldane, the Bank of England’s chief economist has said that the economy has recovered half the output lost during lockdown.
He told the Treasury Select Committee this week that the economy had experienced a bounce-back in activity, with almost half the quarter’s plunge in output experienced during March and April clawed back. He maintained that the recovery is following a V shape.
Following the responses to the Bank of England’s Decision Maker Panel (DMP) survey, analysis indicates that the Midlands could lose around 517,000 private sector employees by 2020 Q4 – the trough of the expected employment effect.
The biggest impact in absolute terms is forecast in the wholesale & retail sector, followed by accommodation & food and admin & support.
The analysis also predicts that by 2020 Q4, there could be a reduction in employment of 10.4% on average across all Midlands LEP areas, with little variance.
This reduction is expected to be greater in certain local authorities within the LEPs including East Lindsey and Derbyshire Dales showing the largest per cent decline in employment of 12.3% and 11.7% respectively.
Regional analysis from the Business Impact of Coronavirus shows that between 29th June – 12th July 2020, 90.3% of responding West Midlands and East Midlands businesses are currently trading and have been for more than the last two weeks (UK 85.1%).
2.4% of West Midlands businesses and 2.9% of East Midlands businesses started trading within the last two weeks after a pause in trading (UK 3.8%).
3.1% of responding West Midlands businesses and 2.4% of East Midlands businesses have paused trading but intend to restart in the next two weeks (UK 4.3%).
Although, 3.6% of responding West Midlands businesses and 4.0% of East Midlands businesses have paused trading and do not intend to restart in the next two weeks (UK 6.3%).
Across the Midlands Engine, there are over 1.4 million workers currently furloughed – 31.8 % of the workforce.
An economic update from PwC shows that nationally around 17% of furloughed workers are at risk of redundancy.
The sector with the highest proportion of furloughed workers at risk of redundancy is accommodation & food services with 32%.
Make UK’s latest manufacturing monitor indicates furlough activity has largely remained consistent with minimal changes since the previous report.
Approximately 77% of manufacturers have furloughed anywhere between 1% and 50% of staff, with the majority of firms within the 26-50% category.
Reviewing recent research on the revival of towns pre-pandemic and the impact of Covid-19 on places sets out the following broad recommendations for future directions to deal with the economic, physical and mental health of residents and businesses:
- Creative and innovative leadership
- Meaningful community engagement
- Understanding places’ unique selling points
- Competitive, safe socialising and experience
- Let there be light, blue and green infrastructure
- Investment in modern age markets and an environment for independents to thrive
- Reshape ownership and taxation models
- Connectivity which enables high-quality interactions
- Create a place for caring and community