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New ONS figures reveal impact of coronavirus on economy and jobs

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The UK has continued to be hit hard by the pandemic. Now enduring a third lockdown, many sectors are struggling, and economic performance and labour force data show steady declines. However, many companies are successfully riding the pandemic by adopting digital and remote working capabilities.

New data from the Office for National Statistics (ONS), which tracks week-by-week changes in the UK economy and consumer habits, show the following headlines:

  • 18% of the UK workforce are currently furloughed.
  • 72% of business are still trading, with 25% temporarily closed or paused.
  • 45% of businesses currently trading and 66% of temporarily paused/closed companies have cash reserves of less than six months.     
  • Of the businesses currently trading, 38% said turnover had not been affected, while 20% said it had decreased by up to 20%. However, 15% of businesses said turnover had reduced by between 20% and 50%, and 12% said it had decreased by over 50%.
  • In the last week of January 2021, UK online job adverts were 78% of the same week’s level in 2020; for London this figure is 63%, though London had received a boost the previous week in 2021. These losses were particularly marked in catering and hospitality (24% of the same week in 2020).

The ONS Labour Force Survey for January 2021 shows continuing falls in employment, rises in unemployment and increased redundancies:

  • The unemployment rate in the three months to November 2020 was estimated to be 5%, 1.2% points higher than the same quarter in 2019.
  • The redundancy rate reached a ‘record high’ of 14.2 per thousand.
  • There were 224,000 fewer vacancies than the same quarter for the previous year, but there were 81,000 more than the previous quarter in 2020 (suggesting some recovery).
  • The number of payrolled employees has fallen by 2.7% since December 2019.

A COVID-19 briefing document by McKinsey & Co, published in February 2021 reveals that executives continue to feel optimistic about prospects for the next six months, particularly in China and India. However, executive confidence has fallen in Asia-Pacific and Europe and is the lowest (at 30%) in Latin America.

The report notes that:

“Companies that embed digital sales into their marketing models see five-times-faster revenue growth compared with previous levels, as well as 30 percent higher acquisition efficiency and cost reductions of 40 to 60 percent within sales.”

PWC’s CEO Panel Survey, published in 2020, also outlined how global businesses were adapting to the pandemic by making long-term pivots to their business model. Among these were plans to make their companies more digital and remote and develop a more flexible, employee-orientated workforce, increasing their share of ‘remote and contingent workers’.

In summary, within the UK economic and labour force trends continue to be depressed. However, globally businesses are also showing resilience by adapting to the new conditions, making permanent changes to their business models. Digital capability enables them to access new markets. Employees will also benefit in the long-term by having more flexible, remote working conditions.

Richard Alberg, CEO of MWS Technology, says:

“The data shows what we have maintained throughout. We know that the UK economy is struggling. Many people are losing their jobs, with few prospects of getting another because vacancies are also lower. This is why we launched Aptem Employ, to enable access to a comprehensive job search and application management tool.

Studies also show, however, the resilience of our business model and innovation focus. We would urge all UK businesses and organisations to look at digital technologies as a way of continuing to deliver education and services and achieve the growth they deserve.”

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