The January 2021 COVID-19 Intelligence Report takes a look back at the available data covering up to and including the Christmas 2020 period.
In addition to the update of the key data which has featured in previous reports, it brings together intelligence from a range of sources, including surveys and our Growth Hub. This month it also features findings from a round of virtual workshops with North East businesses - commissioned in order to give as full a picture as possible of the impact the pandemic is having on our economy.
Looking at the report, the first thing to highlight is that national GDP began to drop following the introduction of national restrictions in November 2020. This follows an uplift during the summer that saw six consecutive monthly increases. 43% of North East businesses reported a drop in turnover during the period 14-27 December. Whilst this is a better position than the end of April 2020 when turnover fell in 72% of businesses, given the season it demonstrates the challenges facing businesses. The sectors that have suffered the most during the pandemic – arts, entertainment and recreation, accommodation, etc - continue to be the worst affected.
Google’s community mobility data showed a sharp increase in visits to retail and recreation locations in the run up to Christmas, but the peak was still 15% down on February 2020. Visits dropped significantly again after the Christmas period.
As noted in previous reports, the North East labour force has been impacted and continues to have the highest rates of unemployment compared to other regions of the UK, with young people aged 16-24 and older adults aged 50-64 being the worst affected. On a more positive note, the North East has a higher level of vacancies than other areas of the country suggesting there is churning in the labour market.
Page nine of the report highlights the findings gathered from the consultation workshops delivered in December 2020 and in early January 2021. It does not take into the account the full impact of the third national lockdown that was introduced on 05 January 2021, but does for some sectors that were at the end of the cycle of meetings.
This section of the report gives us a sense of how businesses are feeling about their current situation and what the future might hold. We’re seeing many of the same trends from earlier reports. Some sectors remain largely unaffected, for example, pharmaceuticals and health, digital, professional services, energy, construction, online retail, agriculture and food production, and many parts of the manufacturing sector. Some have even experienced growth during the pandemic.
More people facing sectors of our economy impacted by ongoing social distancing – hospitality, culture, leisure, tourism, non-essential retail, and professional services – continue to be badly hit by the impact of local and national restrictions. These sectors are all high employers in the North East and consideration needs to be given to how ongoing restrictions and the end of government financial support schemes in April will impact jobs.
The findings in this report also provide some positive signs. Some sectors are actively investing in their workforce. The construction, manufacturing and agriculture industries have recognised the need to recruit and train young people, as well as retrain and reskill existing staff. However, the workshops also highlighted that sectors suffering the most because of COVID-19 are also the ones at risk of losing valuable skills as staff remain on furlough or leave the sector due to redundancy or finding new employment.
These trends are working through into social trends in the North East. The coronavirus pandemic is highlighting and exacerbating economic disparity in our region as deprived areas are seeing the highest unemployment and claimant rates. They are also the areas most likely to be digitally excluded, adding another barrier to employment during the pandemic.
The impact on our places is also divergent. Retail locations, and in particular high street retail, has been badly hit by both regional and national restrictions. The evidence continues to suggest that people are shopping closer to home as local shopping centres are performing well.
On a more positive note, we’re seeing ongoing interest in both commercial and industrial properties across the North East, reinforcing that parts of our manufacturing sector have remained resilient during the pandemic and that commercial investment is continuing.
The report concludes with a look ahead to our economic recovery from coronavirus and the need for continued government support for the worst hit sectors.
It also looks at the importance of retraining and investing in our workforce to ensure we’re supporting people back into employment, or helping those returning from furlough to update and improve their skills. It is clear that it is not only the sectors within which jobs are located that is changing, but also the nature of the work, with more online working and trading likely to be a permanent change in many of our sectors, with longer term implications for our priorities.
To find out more about the how the North East plans to recover from the coronavirus pandemic, please read the Recovery and Renewal Deal for the North East published by the North East COVID-19 Economic Response Group. It sets out the region’s plan to unlock half for the 100,000 more jobs required to support our quick recovery. You can read the Recovery and Renewal Deal here.
By Richard Baker, Strategy and Policy Director at the North East Local Enterprise Partnership.