Today’s GDP release, and in particular how the economy has adapted, a thread.👇
After 6 months of growth, the economy started shrinking again in November as tighter restrictions were in place. (Though there were variations across Wales, England, Scotland and Northern Ireland.) (1/n)
The economy shrank by 2.6% in November. In normal times this would be a significant downturn, but it is much smaller than the falls seen with the first restrictions in the spring: April GDP fell by around 20%. In that sense it is good news. But why the smaller fall? (2/n)
Firstly, some industries remain very depressed. Airlines (air transport in the chart) for example, were operating at very low levels in October so there wasn’t much further for their output to fall. This is different from the picture in Mar/Apr. (3/n)
The same is true, though perhaps less pronounced, for bars/restaurants and other parts of the service sector. (4/n)
Secondly, some sections of the economy have undergone a structural shift that has allowed them to continue to meet demand/produce output. Perhaps the best example is in retail. Overall sales in November were higher than pre-pandemic despite the restrictions. (5/n)
This is due, in part, to the shift online, which allowed sales to continue when shops were shut. These structural shifts create winners (on-line retailers) and losers (high-street), so a positive overall story can hide some significant distress for some businesses. (6/n)
There are also knock-on effects of this move on-line, with courier/postal services seeing growth through the pandemic. (7/n)
And there have been wider changes: food retailers have gained at the expenses of restaurants, and home improvement shops have benefited as consumers appeared to shift expenditure from other activities such as holidays and travel. (8/n)
Whether these changes are permanent or temporary, we will have to wait to see. (9/n)
Thirdly, individual industries (and businesses) have become more resilient to the restrictions. We saw big falls in construction during the first set of national restrictions, but continued growth during the November restrictions. (10/n)
This is likely due to social distancing in workplaces, etc. that have allowed operations to continue. (11/n)
Overall, the economic impacts are smaller this time. But we should not lose sight of the fact that the economy has still taken a large hit from the pandemic, and beneath the surface there are hugely different experiences for different sectors, businesses and people. (ENDS)
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A thread on comparing different economies: similarities and differences. 👇
Last week saw the publication of @ONS data on GDP. As an important indicator of economic performance, GDP growth is often compared between countries. (1/n)
I have seen a few comments about whether the composition of activity in an economy (e.g. services vs manufacturing) has an effect on relative economic performance during the pandemic. That is difficult to answer, and I am not going to try to deal with that, but… (2/n)
[THREAD] The UK labour market has been profoundly affected by the pandemic. The effects, however, have been complex and different from how the financial crisis played out. Six key points from today’s @ONS data:
Firstly, people are losing jobs and employment is falling. But the falls are relatively modest compared to the huge falls in GDP we are seeing (GDP fell by just under 20% in the three months to May YoY; payrolls fell just over 2% July YoY). (1/n)
The number of people on the payroll fell by just over 100,000 in July and is down 700,000 since March. (2/n)
Retail sales data for June, from the @ONS, a thread 👇. (All the hard work of @StatsRhian and team.)
Retail sales had a good June, growing around 14% compared to May, and we are almost back to the level we saw before the pandemic. (1/n)
But we are certainly not back to how things were. There are some huge changes within overall retails sales discussed below, all of which have happened in a few months. (2/n)
Labour market statistics: a thread pulling together the various data sources.👇
The overall picture has been a worsening labour market, but the rate of weakening slowed into June. For example, HMRC tax data showed the fall in people on the payroll moderated. (1/n)
(Of course all of this does not reflect recently reported job losses, which might show up in future labour market statistics.) (2/n)
Thread on today’s @ONS economic data, and what this means for the economy 👇
As was expected, we saw a huge fall in economic activity in April, down 20% compared to March. Taking March and April together, the fall was 25%: in two months the economy shrank by a quarter. (1/n)
At risk of stating the obvious, the size and suddenness of the fall in economic activity is completely unprecedented. The biggest fall before the coronavirus was just over 2%. (2/n)
On Tuesday we @ONS published the latest statistics on employment. People have questioned whether the definition of employed (working more than 1 hour) distorts the picture. The quick answer is no. Thread... (1/7)
Only a small proportion (1.5% of workers) record very short hours (below 6hrs/wk). This hasn’t changed much over the last 10 years, and is lower than around 25 years ago. Only around 8% work 15hrs/wk or fewer, down from around 10% 25 years ago. (2/7)
Low hours are a modest share of employment, and have not been rising. So the recent growth in the employment rate is not caused by lots of people on low numbers of hours a week. (3/7)