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COVID-19 has had a substantial impact on all areas of the UK Economy, however according to data analysed by Commercial Property Specialists Instant Offices, the sectors that are least affected are mostly likely to see a faster bounce back with predictions pointing towards a slow recovery starting from July 2020 following relaxed lockdown measures.
How much could COVID-19 increase or decrease each Sectors’ GVA in 2020?
By looking to the top sectors that are most and least impacted to overall productivity and output, the sectors that are likely to be the least and most affected are:
- Education and Utilities sectors as operations have still largely been able to continue remotely.
- Due to the high demand for services, health & social care, and public admin sectors are both likely to see increased economic productivity or GVA.
- Food services as well as the hotel and transport sectors are likely to see the most significant impact to overall productivity and output, resulting in lower GVA.
UK Regional GVA Recovery in 2021
Based on the sectoral make-up of each region, the analysis shows London’s GVA is set to be theleast affected due to its extensive service-based economy and remote workforce, with a reduction of 7.3% in 2020. However, in 2021, they will only see a slight increase at 8%. In contrast, the West Midlands is forecast to see GVA reduce by 10.1% but in 2021 this is likely to increase at 11.3% due to its sizeable automotive sector. Similarly, in the East of England, slow recovery in its large construction sector will see GVA reduce by 10% this year but will see an increase at 11.1%.
Trends in China are helping to shape predictions for future bounce-back closer to home. A recent Statista survey on the impact of COVID-19 on Chinese society asked 5,859 respondents aged between 18 and 60 years which industries are likely torecover the fastestafter the crisis is over.
The impact of the COVID-19 crisis is pushing many of these sectors to adapt and adjust. For example:
- Education has experienced a relatively low impact, as teachers and schools have made a move to virtual classrooms. Analysts are predicting that online learning will become the “new normal”.
- Commercial real estate has been significantly impacted, and companies are adapting quickly to offset this by offering virtual tours.
Of the analysis, John Williams, Head of Marketing at The Instant Group says,
"This period of uncertainty has put immense pressure on virtually every sector across the board, however, we’re also seeing unprecedented levels of innovation emerge from the crisis. Employees are working remotely, classrooms have gone online, the property industry is doing virtual tours and alcohol companies are producing hygiene products. Our ability to adapt and future-proof is inspiring. Despite a gloomy GDP outlook for most countries, we are slowly seeing companies resumebusiness operations inmost areas ofChina, which is an encouragingindication."
“The good news is the scale of recovery across most UK regions in 2021 will be similar to contractions in 2020, indicating that as most sectors start to recover, local economies could make up for lost ground. The economy is not set to return to its 2019 size until 2023, however slow bounce back is expected across the board as consumer demand increases post-COVID-19, and global economic activity starts to ramp up.”