New Report Reveals Daily Impact Of Coronavirus Lockdown On South West Economy

A new report has revealed the daily impact of the coronavirus lockdown on the South West economy and highlighted which sectors are performing the strongest and protecting the UK from even greater damage.

According to UK Powerhouse, a report by Irwin Mitchell and the Centre for Economic and Business Research (Cebr), GVA is estimated to be falling in the region by 36%, or £185m a day during the lockdown.

The report says that aside from Scotland, the South West has the greatest agricultural GVA per day of any region at £6.4m per day pre-COVID. This is a sector that, given the essential nature of it, is weathering the lockdown relatively well. In the South West, agricultural GVA has only fallen by 12%; £0.8m of GVA per day.

Accommodation and food services play a proportionally larger role in the South West economy and the report says the GVA generated by the sector prior to the COVID-19 crisis was 3.8% of the South West total, compared to 2.8% for the UK economy as a whole. Given that this sector has seen a 95% fall in value-added, this has had a significant impact on the local economy.

GVA loss per day across the UK regions

Source: ONS, Labour Force Survey, BRES, Cebr analysis

Despite claiming that the UK economy is losing £2.7 billion a day in absolute terms, the report says some sectors such as agricultural, forestry and fishing, along with the information and communication sector, have remained strong with a relatively low daily GVA fall of 14% and 2% respectively.

It adds that a national 1.3% rise in the share of the workforce mainly working from home over the past five years puts the UK economy in a more resilient position in terms of share of people able to work remotely. 

Interestingly the South West saw the largest rise in the share of people who mainly work from home for their job over the past five years, increasing by 2.2% to stand at 6.8%, the second highest share out of the 12 UK constituent nations and regions.

Victoria Brackett, CEO of Irwin Mitchell’s Business Legal Services division, said: “Although in absolute terms the South West economy is losing almost £200m a day, relatively it has fared better than many regions in the UK.

“One of the reasons for this is that the region has one of the highest share of the workforce that worked from home before the virus started spreading. For these people, it is likely that their ability to work from home will continue on a fairly usual basis. Furthermore, they would have been well set up at the start of the lockdown, as they already had the space and equipment to work from home.”

Methodology

To calculate the UK’s impact (and the regions), Cebr calculated the pre-COVID GVA per day. To assess the lockdown’s impact, it estimated demand and supply-side impacts for each of the sectors below – these impacts include elements such as ability to work remotely, proportion of workers off sick, actual demand for the products and supply-chain disruptions that the lockdown has caused. As such, each sector listed below has an estimate of the impact of the lockdown and is presented in absolute terms and a percentage loss.