NW losing £280m GVA per day during lockdown, claims report

A new report claims that GVA in the North West is falling by 36.7%, or £279m a day during the coronavirus lockdown.

This is a worse rate than the impact for England as a whole (33.9%) and is due to the high proportion of the region’s economy that is attributed to manufacturing – 12.3% compared with 9.3% for the UK as a whole.

Given the fall in consumer demand, the manufacturing sector has done particularly badly.

The figures are from UK Powerhouse, a report by law firm Irwin Mitchell and the Centre for Economic and Business Research (Cebr).

It reveals the daily impact of the coronavirus lockdown on the UK’s economy and highlights which sectors are performing the strongest and protecting the UK from even greater damage.

The North West also has a higher than average proportion of its workforce engaged in the wholesale, retail and repair of motor vehicles.

This sector has also been affected particularly badly given the lockdown restriction and the wider economic crisis.

Despite stating that the UK economy is losing £2.7bn 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 two per cent, 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.

Up just 0.7% in the same period, the North West is not as far along as other regions, but lockdown could lead to a sea change in business attitudes to remote working.

The report claims that London is the worst hit region, judged on total loss per day, at £575m. The North East is the least affected region, with a daily loss of £71m.

The UK, as a whole, is estimated to be losing £2.665bn per day in GVA, with England the biggest loser on £2.322bn of GVA lost per day.

Laura Harper, partner at Irwin Mitchell in Manchester, said: “While manufacturing and retail and leisure have been hit hard in the North West, other sectors are being affected with other traditionally strong sectors in the region, including media and entertainment and financial and professional services, being impacted in what are very difficult circumstances, albeit to a lesser degree.

“As we all move to a ‘new normal’ post-lockdown, different regions are going to come out of this at their own pace and tailored support in key areas could prove vital to economic recovery.

“The last election saw talk of ‘levelling up’ the economy and a challenging task has undoubtedly become harder given the impact of coronavirus.

“The shutdown to halt the spread of COVID-19 is having a dramatic effect on the whole of the UK economy and certain regions are expected to weather the storm better than others.

“The report offers an insight into what form regional support might need to look like in the North West once we start down the road to economic recovery.”

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 – 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.