As the year draws to a close, and with vaccine roll-out underway, there is some cause for optimism as we head into 2021 but for many businesses conditions will remain tough.
For businesses that are either closed or are continually adapting, as a result of ever-changing government restrictions (e.g. live events, hospitality, aviation, visitor attractions, leisure, retail and their suppliers) the focus is on surviving the winter. Restrictions on the indoor mixing of households, the cold weather and restrictions on the serving of alcohol without food being the latest challenges for hospitality operators.
Within the retail sector, national chains appear to have been harder hit than independent retailers, with most commentators agreeing that the bricks and mortar retail sector will remain smaller in the long term, an example of structural change accelerated by the pandemic.
As the EU transition period comes to an end and with talks regarding a trade deal on-going, the uncertainty remains a challenge for local firms that import or export goods.
Overall, the Office for Budget Responsibility (OBR) estimates that UK GDP for 2020 will be down 11% on 2019. The latest local data suggests that the Buckinghamshire economy will have experienced a similar-sized hit. In the first two weeks of November, an estimated 43% of Buckinghamshire firms had ‘lower than normal turnover’ for this time of year, slightly lower than the national average. With the proportion of firms taking out Covid-19 business loans in Buckinghamshire being in-line with the national average.
On the jobs front, the number of Buckinghamshire residents claiming ‘out of work’ benefits remained high in October (up 9,300 from March 2020), with a warning from the OBR that unemployment would not peak until next year. That said, the claimant count rate for Buckinghamshire remains one of the lowest of all 38 LEP areas. At the end of September 2020, 9% of Buckinghamshire employees were on furlough, slightly higher than the national average of 8%.
Despite the challenges, many local sectors appear to have weathered the Covid-19 storm well (e.g. digital technology, space, high-performance engineering, TV and film, construction and real estate) and the last six months have seen some significant developments for the long-term future of the economy.
These include: the opening of the Westcott Innovation Centre (a new multi-million centre which will lead innovation in the fields of space propulsion and drone technologies); the continuing take-up of space at the Silverstone Enterprise Zone by cutting edge high-performance technology firms, many of whom are involved with green transport technologies; and significant expansion plans at Pinewood Studios.
These developments will create high-value local jobs and stimulate innovation, which should not only aid the speed and direction of Buckinghamshire’s economic recovery but should also help reverse Buckinghamshire’s recent poor productivity growth.
Buckinghamshire LEP is maintaining an up-to-date evidence pack to collate all the available data on local impact, which can be accessed here. The evidence is being used to inform immediate economic recovery activity and long-term strategic planning. In addition, the LEP is producing two monthly labour market reports (claimant count and job postings). These can be accessed here.