The UK economy is losing £2.7bn a day in absolute terms due to the existing lockdown, a new report has revealed.
According to UK Powerhouse study, which has been produced by national law firm, Irwin Mitchell, and the Centre for Economics & Business Research (Cebr), the worst hit UK sectors are accommodation, food, manufacturing, and the construction industry.
Construction, for instance, is losing £301.5m a day and its GVA (gross value added) has fallen from £462.1m per day from before lockdown to £160.6 m a day – a decline of 65%.
The research also found that the property industry is shrinking by £261.5m a day, from a GVA of £1097.6m per day before lockdown to £836.1m – a decline of 24%.
Coronavirus lockdown impact in the UK by sector
|
GVA per day pre-corona virus, £m |
Loss per day, £m |
Remaining, £m |
% lost |
|
|
Agriculture, forestry and fishing |
52.9 |
7.3 |
45.6 |
14% |
|
Mining and quarrying |
46.9 |
28.0 |
18.9 |
60% |
|
Manufacturing |
720.0 |
539.8 |
180.2 |
75% |
|
Electricity, gas, steam and air conditioning supply |
105.8 |
20.1 |
85.7 |
19% |
|
Water supply, sewerage, waste management and remediation activities |
94.0 |
0.0 |
94.0 |
0% |
|
Construction |
462.1 |
301.5 |
160.6 |
65% |
|
Wholesale and retail trade; repair of motor vehicles and motorcycles |
800.3 |
486.5 |
313.9 |
61% |
|
Transport and storage |
316.9 |
158.7 |
158.2 |
50% |
|
Accommodation and food service activities |
217.4 |
204.9 |
12.5 |
94% |
|
Information and communication |
583.2 |
12.6 |
570.6 |
2% |
|
Financial and insurance activities |
607.1 |
110.4 |
496.7 |
18% |
|
Real estate activities |
1097.6 |
261.5 |
836.1 |
24% |
|
Professional, scientific and technical activities |
630.4 |
149.8 |
480.6 |
24% |
|
Administrative and support service activities |
410.0 |
81.7 |
328.4 |
20% |
|
Public administration and defence; compulsory social security |
372.1 |
0.0 |
372.1 |
0% |
|
Education |
450.9 |
207.8 |
243.1 |
46% |
|
Human health and social work activities |
574.1 |
-14.3 |
588.4 |
-2% |
|
Arts, entertainment and recreation |
261.2 |
113.9 |
147.3 |
44% |
|
Total |
7,803.1 |
2,670.2 |
5,132.9 |
34% |
Source: ONS, Labour Force Survey, BRES, Cebr analysis
Despite the negatives, the report does state that the UK has been in a relatively good position to face lockdown due a significant share of the economy being comprised of the financial and insurance services sector which is estimated to be experiencing a relatively low daily reduction in GVA of just 18%.
The report says this sector can largely be operated remotely and thus people have been working from home, albeit with some loss in productivity.
The report notes that this sector has also to an extent shielded London’s economy because although the city region has the greatest absolute reduction in GVA per day, its relative fall of total economic output of 28% is the lowest in the UK.
Other sectors such as agricultural, forestry and fishing, along with the information and communication sector, have also remained strong with a relatively low daily GVA fall of 14% and 2% respectively.
GVA loss per day across the UK regions
|
Region |
Total Loss per day £m |
Total % Loss |
|
London |
575 |
27.7% |
|
South East |
393 |
34.7% |
|
South West |
185 |
36.3% |
|
East of England |
241 |
35.5% |
|
East Midlands |
164 |
39.7% |
|
West Midlands |
245 |
39.5% |
|
North West |
279 |
36.7% |
|
North East |
71 |
34.3% |
|
Yorkshire and the Humber |
170 |
36.6% |
|
England |
2,323 |
33.9% |
|
Scotland |
214 |
35.7% |
|
Wales |
79 |
36.5% |
|
Northern Ireland |
49 |
38.4% |
|
UK |
2,665 |
34.1% |
Source: ONS, Labour Force Survey, BRES, Cebr analysis
Adrian Barlow, national head of real estate at Irwin Mitchell, said: “Coronavirus is affecting sectors of the economy differently and this means that regional economies will recover at different rates when the lockdown restrictions are reduced.
“Given the massive impact on the construction sector and negative impact on real estate it is vital that these restrictions are lifted at the right time and the government supports different sectors accordingly and does not deviate from its crucial ’levelling up’ agenda.”
