B2B Economic Outlook: Inc Impact of COVID-19 - UK - December 2020

OVERVIEW
Key takeaways
Economic overview
Public sector borrowing dominated by COVID-19
Bank rate impacted by COVID-19 too
Unemployment rising
CPI edging upwards
Earnings also edging upwards
Business health
Business investment takes major hit
Business confidence falls
Company births and deaths severely impacted
Special focus: Construction
GDP exaggerated again
What’s next?
At last – a trade deal with the EU
GDP
ECONOMIC OVERVIEW
UK Structure
Figure 1: Structure of the UK economy, by sector, start of 2020 (% of turnover by companies)
Figure 2: Structure of the UK economy, by size of company, start of 2020 (% of turnover by companies)
GDP – the substantial COVID-19 shock
Figure 3: UK GDP monthly index, January 2007-October 2020
Figure 4: Monthly output index of UK sectors, Jan-Oct 2020
Public sector borrowing – the substantial COVID-19 related increase
Figure 5: Public sector net borrowing, 2006/07 - April-October 2020
Bank rate – the COVID-19 related lowest level ever
Figure 6: Bank rate, by date of adjustment, 2008-20
CPI
Figure 7: Consumer price index, 12-month rate, October 2019 – October 2020
Employment, furlough and unemployment
Figure 8: UK employment rate, July-September 2007-20
Figure 9: Number of furloughed employments, March-August 2020
Figure 10: Coronavirus Job Retention Scheme claims, at 31 August 2020
Figure 11: Unemployment by industry, July-September 2019 and 2020
Earnings strengthen in Q3
Figure 12: Annual growth in average weekly earnings, Q3 2007-20
BUSINESS HEALTH
Business investment
Figure 13: Business investment, Q1 2018 – Q2 2020
Business confidence
Figure 14: ICAEW UK National Business ConfidenceTM index, Q2 2008 – Q4 2020
Productivity
Figure 15: UK productivity measured by output per hour, Q1 2008- Q3 2020
Figure 16: UK Productivity measured by inputs and outputs, Q1 2018 – Q2 2020
Business births and deaths
Figure 17: Business births and deaths, 2012-2019
SPECIAL FOCUS: CONSTRUCTION
General
Figure 18: UK GDP, new construction and R&M growth rate comparison, 2007-19
Figure 19: UK GDP, new construction and R&M growth rate quarterly comparison, 2019-Q3 2020
Housing
Figure 20: New house building construction activity, 2007-2020 (Prepared on 14 December 2020)
Figure 21: Comparison of social and private housing completions in the UK, 1970-2019
Private industrial construction
Figure 22: Private industrial construction activity, 2007-2020 (Prepared on 14 December 2020)
Private commercial construction
Figure 23: Private commercial construction activity, 2007-2020 (Prepared on 14 December 2020)
New public non-residential construction
Figure 24: Public non-residential construction activity, 2007-2020 (Prepared on 14 December 2020)
New infrastructure
Figure 25: New infrastructure activity, 2007-2020 (Prepared on 14 December 2020)
Repair and maintenance
Figure 26: Repair and maintenance activity, 2007-2020 (Prepared on 14 December 2020)
WHAT’S NEXT?
The December Brexit trade deal changes the prospects
A phased and uncertain recovery from COVID-19
Figure 27: Expectations of GDP annual percentage change, 2020-25
Figure 28: Short, medium and long term impact of COVID on the UK economy, by sector, Prepared on 14 December 2020  and reviewed 12 January 2021
Unemployment
Figure 29: Expectations of employment and unemployment, 2020-25
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations