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State of the Region 2020 Full Report

Furloughed Workers per Sector

HMRC released at a national level the number of workers furloughed by broad sectors. The broad sectors were grouped to largely align to the WMCA ten sectors to help further understand impacts to vulnerable sectors. Applying the national proportions of workers furloughed per sector to the WMCA (3 LEP) furlough numbers suggests the cultural economy, including the sports sector, will have the highest number of workers furloughed at an estimated number of 100,444 workers. This potentially accounts for 74.3% of jobs in the cultural economy, including the sports sector, in the WMCA (3 LEP). 

This is followed by the retail sector with an estimated 91,856 workers furloughed in the WMCA (3 LEP) area. This potentially accounts for 30.0% of jobs in this sector the WMCA (3 LEP). Notably, when looking at the proportion of jobs per sector, the retail sector is higher than the national average (16.6% vs 15.3%). 

The business, professional and financial services also has a potential high number of workers furloughed in the WMCA (3 LEP) area at 91,737 workers, which is an estimated 22.8% of jobs in this sector.  

The sector with the lowest proportion of workers furloughed is low carbon and environment technologies, with an estimated number of 5,523 workers furloughed in this sector for the WMCA (3 LEP) area, however this may equate to 19.3% of jobs in the WMCA (3 LEP) area. The next lowest sector at an estimated 9,586 workers furloughed in the digital and creative sector which is around 19.4% of jobs. 

The following table firstly shows the potential number of workers furloughed per sector which have been coloured red through to green depending on how heavily impacted and also in the table is the total number and proportion of jobs in the WMCA per sector, highlighted in blue demonstrates where the WMCA has a higher proportion of jobs when compared to national:

  % of National Furloughed Estimated Number of WMCA Furloughed WMCA Jobs (2018) % of WMCA Workers Furloughed to Jobs WMCA % of Jobs Total England % of Jobs
Advanced Manufacturing 9.60% 47,417 209,400 22.60% 11.30% 8.00%
Business, Professional and Financial Services 18.50% 91,737 402,040 22.80% 21.80% 22.90%
Construction  7.80% 38,778 121,000 32.00% 6.60% 7.10%
Cultural Economy Inc. Sports 20.20% 100,444 135,150 74.30% 7.30% 9.90%
Digital and Creative 1.90% 9,586 49,320 19.40% 2.70% 4.40%
Life Sciences & Healthcare 3.80% 18,944 239,000 7.90% 12.90% 12.70%
Logistics & Transport Technologies 3.50% 17,307 109,355 15.80% 5.90% 4.90%
Low Carbon and Environment Technologies 1.10% 5,523 28,615 19.30% 1.60% 1.80%
Public Sector Inc. Education 2.50% 12,428 242,000 5.10% 13.10% 12.90%
Retail 18.50% 91,856 306,000 30.00% 16.60% 15.30%
Unknown/ Other 12.50% 62,025        
Total 100% 496,200 1,846,000 26.90% 100.00% 100.00%

Retail footfall fell to 20% of its 2019 levels and remains below 40%, with the West Midlands and the North East seeing the highest falls between 74% and 76%, however the lowest fall is still significant at 68%.

Consumer spending data shows small towns geared around tourism are hardest hit. There is a significant localisation effect leading to inner city areas doing better than suburbs. Consumer spend in Coventry has seen a 47% drop, Birmingham saw a 42% drop and Wolverhampton and Walsall a 46% drop.

Consumer spend is down significantly, and opening businesses up will have no effect unless people buy the products and services. There has been significant behaviour change with a drop in spend of more than a third and latest data from Barclays says spending is far lower than the Bank of England are forecasting; as yet we do not know yet whether this change will become the norm. However people are clearing household debt greater than ever before £3.8bn has been paid off and savings have gone up by £13.1bn. The virus has accelerated recent trends, with online shopping increasing to 60% against an average of 8%. Businesses have responded with significant take up of online provision and technology transformation. Rebuilding customer experience and appealing to these changing values will be key for business success and revival.  

All businesses will be impacted by the Covid-19 pandemic. Some sectors may benefit financially, while others will suffer huge losses. Those countries with more service-oriented economies, like the UK, will be more negatively affected and will suffer larger negative employment effects. The UK economy was not in great shape coming into the Covid-19 crisis, after experiencing years’ of little growth and investment, due to the uncertainty of Brexit. While we await the official data to confirm that the UK is currently in recession it is becoming clear the Office of Budget Responsibility’s (OBR) forecasted 35% downturn in economic output between April and June as a result of the Covid-19 crisis is likely to be realised.

The ONS Business Impact of Covid-19 Survey (BICS) found that 25% of businesses had closed temporarily and 0.4% had permanently closed. Researchers at the Enterprise Research Centre (ERC) have calculated that, as part of work for the British Business Bank, this could easily translate into the loss of 85,000 firms and 1.2m jobs by September 2020 pushing the unemployment and claimant count even higher than it is now. At the time of writing, 8m jobs in over 1m firms have been ‘furloughed’ under the Government’s Job Retention Scheme with £11.1bn claimed so far, giving an indication of the size of the ‘pause’ button on the economy.

  • Spend in:

    Coventry down 47%

    Wolverhampton 46%

    Birmingham 42%

  • Online shopping has increased to 60% from an average of 8%

  • Retail footfall  fell by up to 76% in the West Midlands

  • Nationally people are clearing debt and saving and increasing savings more than ever before