Coronavirus recession: The 7 stats revealing how badly the economy is hurting | Business News

Official figures have confirmed the extent of the UK’s recession – the consequence of lockdown restrictions to curb the spread of coronavirus.

The Office for National Statistics (ONS) has released reams of early data, which is subject to revision, covering the record hit to the economy.

Here are seven statistics which give insight on the pain so far

Deepest slump since 1974

The fall in gross domestic product (GDP) of 20.4% means this was the worst quarterly fall since records began in the 1950s, easily overtaking the hit from the miners’ strikes in early 1974.

They crippled output because a “three day week” was imposed on businesses to conserve electricity.

GDP plunged by 2.7% in the first quarter of 1974 as a result. In comparison, the financial crisis of 2008/9 resulted in a 2% fall in quarterly growth at its peak.

The UK economy is not (quite) the worst affected

When our economic performance is compared to our closest competitors, it shows the UK behind Spain only.

The ONS reported a cumulative hit of 22.1% to GDP covering the first half of the year.

Spain’s was higher at 22.7% while France was third-worst at 18.9%. The US registered a fall of 10.6%.

This is the eighth technical recession for the UK since ONS records began in 1955

We know this is the sharpest recession to date but how does it compare to the last recession in recent history?

The plunge in output that followed the financial crisis of 2008 continued for five consecutive quarters – with growth falling by a total 6%.

Economy is 17.2% down on pre-lockdown level

Output suffered a record slump of 20% in April – the first full month of the lockdown – but recovered some growth in May which accelerated in June as more sections of the economy gradually re-opened.

The ONS says that, as oh the end of June, the economy remained a sixth smaller than it was pre-crisis.

A “large number of businesses” remained closed

Data showed a significant number of businesses reporting zero turnover in June.

The figures, taken from survey responses, cover the three main sectors of the UK economy and will likely reflect the differing regional lockdown restrictions that saw England start to emerge from hibernation first.

The data suggested that 5.8% of UK manufacturing firms, 17.4% of construction companies and 12.6% of businesses in the dominant services sector remained closed.

The greatest pain has been felt by pubs, hotels and airlines

The ONS uses a series of sub-categories to measure growth in the main three sectors of the UK economy.

Within services, which accounts for almost 80% of the country’s output, accommodation and food services saw the greatest decline in output during the three months to June, falling almost 87%.

Pubs and bars “continued to suffer” from total lockdown in June but forward bookings helped hotels and guest houses register a small recovery.

Air travel is covered through a wider transport category but the ONS said air transport in June remained 95.7% down on February’s levels.

There is one winner

If there are parts of the economy to have benefited from the coronavirus crisis, you would be forgiven for thinking about supermarkets or the makers of hygiene and cleaning products.

In the ONS sub-categories governing the early data for the second quarter, there is only one showing growth.

That is public administration and defence. It rose by 0.4% between April and June compared to the previous three months.

Source Article

Next Post

Sumner Redstone: Billionaire media tycoon dies aged 97 | Business News

US media mogul Sumner Redstone, who took his father’s  drive-in movie business and built it into an empire that included Paramount Pictures, CBS and MTV, has died aged 97. The billionaire tycoon was remembered by ViacomCBS, which he led for decades, for his “unparalleled passion to win, his endless intellectual […]