What does the current COVID economic landscape look like?

Most experts agree that it will take considerable time to restore the country to pre-COVID levels of economic prosperity, growth and productivity that we have previously enjoyed.

We take a look at the impact on our economy and the jobs picture from a national and local level for both temporary and permanent placements to give an indication of current economic situation.

Impact on the economy and unemployment
Last month the Bank of England predicted that the jobless rate will almost double to 7.5% and only fall slowly throughout 2021.

The Office for National Statistics (ONS) revealed that almost 650,000 workers lost their jobs during the pandemic. Worryingly some experts predict that this will increase when the furlough scheme ends in October as businesses struggle to stay afloat without the extra funding that the scheme has provided throughout the pandemic.

Almost a quarter of UK jobs were placed on furlough under the job retention highlighting the dependency in which the scheme has created.

The number of employees on UK payrolls fell by 730,000 from March to July and there is an added risk of redundancies. It was revealed last week that more than more than 380,000 positions were at risk between May and July 2020 which is more than double the previous three month peak of 180,000 in 2009.
Over the past three months the number of people claiming out-of-work benefits reached 2.7 million in July – more than doubling since the crisis began in March and this, is sure to put a strain on the economy.

Outlook from a local perspective
Although the outlook looks fairly gloomy, there has been an uptick in demand for temporary staff across the north of England which suggests we could be turning a corner as businesses become more confident in their ability to hire new staff.

Temporary work is critical in any recovery and this is evidenced in past economic recessions as businesses opt for short-term solutions of temporary staff to meet demand whilst the future is uncertain – not to mention temporary work allows jobseekers to find work quickly.

There is also a huge increase in people seeking temporary work – numbers which we haven’t seen since the global financial crisis in 2009. In addition to this, we have also seen the biggest rise in staff availability in the North since data collection began 23 years ago. This suggests that the surge is driven by the COVID-19 redundancies.

Areas in particular demand for skills include accounting and financial, engineering, legal and IT sectors.

Permanent staff salaries continue to fall during August however it is the slowest rate of reduction in the five month sequence of decline. Temporary wages also fell for the sixth month in a row – evidence suggests that weaker demand and increased labour supply have contributed to the download pressure on pay.

There is no hiding from the uncertainly surrounding both the pandemic and Brexit. The government must be instrumental in providing support for all types of businesses as the furlough scheme ends, whilst also taking a lead on training and up-skilling jobseekers to drive productivity growth back to normal levels.

It is important to note that this current outlook could change rapidly if a second lockdown comes into effect in the near future.