COVID-19 Presented by UK Industry Analysts: Samuel Kotze John - PowerPoint PPT Presentation

Economic insights: COVID-19 Presented by UK Industry Analysts: Samuel Kotze John Griffin 20 th April 2020

COVID-19 Statistics

United Kingdom COVID-19 Statistics COVID-19 Containment Data 100000 Latest UK figures 19 th April 2020 10000 • Total number of lab-confirmed Confirmed Cases (Log10) UK cases: 120,067 1000 • Daily number of lab-confirmed UK cases: 5,850 100 10 United Kingdom has exited the Coronavirus confirmed cases exponential growth phase. 1 1 10 100 1000 10000 100000 1000000 Total Confirmed Cases (Log10) South Korea United Kingdom US Ireland Mexico China Germany Greece Poly. (South Korea) Poly. (United Kingdom) Poly. (US) Poly. (Ireland) Poly. (Mexico) Poly. (China) Poly. (Germany)

United Kingdom COVID-19 Statistics 7 th April COVID-19 Containment Trend 100000 10000 Confirmed Cases (Log10) 1000 Exponential case growth 100 10 1 1 10 100 1000 10000 100000 1000000 Total Confirmed Cases (Log10) South Korea United Kingdom US Ireland Mexico China Germany Poly. (South Korea) Poly. (United Kingdom) Poly. (US) Poly. (Ireland) Poly. (Mexico) Poly. (China) Poly. (Germany)

United Kingdom COVID-19 Statistics 20 th April COVID-19 Containment Trend 100000 10000 Confirmed Cases (Log10) 1000 100 10 1 1 10 100 1000 10000 100000 1000000 Total Confirmed Cases (Log10) South Korea United Kingdom US Ireland Mexico China Germany Poly. (South Korea) Poly. (United Kingdom) Poly. (US) Poly. (Ireland) Poly. (Mexico) Poly. (China) Poly. (Germany)

United Kingdom COVID-19 Statistics 20 th April COVID-19 Containment Trend 100000 10000 Confirmed Cases (Log10) 1000 Exponential case peak reached 100 10 1 1 10 100 1000 10000 100000 1000000 Total Confirmed Cases (Log10) South Korea United Kingdom US Ireland Mexico China Germany Poly. (South Korea) Poly. (United Kingdom) Poly. (US) Poly. (Ireland) Poly. (Mexico) Poly. (China)

Government response

United Kingdom government response Updated Government measures: • 16 th April: The government announced an extension of lockdown measures for at least another three weeks. Other developments: 8 th April: The chancellor set out an extra £750 million coronavirus funding for frontline charities. • 18 th April: The government announced an £1.6 billion extra support for English councils. • 20 th April: The government unveiled a £1.3 billion package to support start-ups. •

Economic indicators

United Kingdom GDP growth Real GDP growth Real GDP decline 20 15 - Real GDP forecast to decline by 35% during first quarter of 2020-21. 10 Percentage change (%) - Steeper fall in output than during Global 5 Financial Crises (GFC). 0 - Faster recovery expected. - Increased government borrowing -5 expected to spur a long-term increase in public sector net debt. -10 -15 1908 1915 1922 1929 1936 1943 1950 1957 1964 1971 1978 1985 1992 1999 2006 2013 2020 Actual OBR scenario

• • • . • • Unemployment Job retention scheme goes live 20 th April. barring exogenous shocks. Recovery anticipated to be relatively quick, case scenario. Unemployment may reach 10% in worst Crises (GFC) unemployment increase. Significantly worse than Global Financial between 16 and 31 March: 950,000 New claims for universal credit made Severe increase in unemployment Unemployment rate (%) 10 12 0 2 4 6 8 Nov-Jan 2000 May-Jul 2000 Nov-Jan 2001 May-Jul 2001 Nov-Jan 2002 May-Jul 2002 Nov-Jan 2003 May-Jul 2003 Nov-Jan 2004 United Kingdom Unemployment Rate May-Jul 2004 Nov-Jan 2005 May-Jul 2005 Nov-Jan 2006 May-Jul 2006 Actual Nov-Jan 2007 May-Jul 2007 Nov-Jan 2008 May-Jul 2008 Nov-Jan 2009 Forecast May-Jul 2009 Nov-Jan 2010 May-Jul 2010 Nov-Jan 2011 May-Jul 2011 Nov-Jan 2012 OBR Scenario May-Jul 2012 Nov-Jan 2013 May-Jul 2013 Nov-Jan 2014 May-Jul 2014 Nov-Jan 2015 May-Jul 2015 Nov-Jan 2016 May-Jul 2016 Nov-Jan 2017 May-Jul 2017 Nov-Jan 2018 May-Jul 2018 Nov-Jan 2019 May-Jul 2019 Nov-Jan 2020 May-Jul 2020

Industries

IBISWorld’s most affected UK sectors Industry Code (UK) Sub-sector A Agriculture, Forestry and Fishing B Mining and Quarrying C Other manufacturing C10-C12 Food and beverage manufacturing C13-C15 Clothing, textiles and footwear manufacturing C16-C17, C22-C25 Material manufacturing C18, C26-C27 Electronics manufacturing C19-C20 Chemicals manufacturing C21 Pharmaceuticals manufacturing C28-C29 Vehicle & Machinery manufacturing D Electricity, Gas, Steam and Air Conditioning Supply E Water Supply; Sewerage, Waste Management and Remediation Activities F Construction G Other wholesale and retail G45 Motor vehicle wholesale and retail G46-G47 Food and beverage wholesale and retail H Transportation and Storage I Accommodation and Food Service Activities J Information and Communication K Insurance K Finance L Real Estate Activities M & S Professional, Scientific and Technical Activities N Administrative and Support Service Activities P Education Q Human Health and Social Work Activities R Arts, Entertainment and Recreation

Manufacturing

Manufacturing Manufacturing PMI 70 Stifled Manufacturing 60 • UK manufacturers suffer by weak new orders and 50 supply chain disruption. 40 Index • Manufacturing PMI records steepest fall in output 30 since July 2012. 20 • Several manufacturers re-purpose operations 10 towards the production of medical equipment. 0 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Jan-16 Jun-16 Nov-16 Apr-17 Sep-17 Feb-18 Jul-18 Dec-18 May-19 Oct-19 Mar-20

Motor Vehicle Manufacturing Revenue growth 25 • Revenue growth: 20 • 2019-20: -8.3% 15 • 2020-21: -18.6% 10 • 2021-21: -11.0% Percentage change (%) 5 0 • Highly globalised nature of the industry -5 -10 leaves it susceptible to coronavirus impact. -15 -20 • SMMT forecast an 18% drop in output in -25 2020. -30

Transportation and Storage

Transportation and Storage • Transport use down 60% for all transport types compared with February. • 95% fall in rail and tube passenger numbers. • Industries most affected: • Urban Passenger Rail Operations. • Intercity Passenger Rail Transport. • Bus and Tramway Operations. • Government support • Temporary nationalisation of rail services. • £400 million bailout for bus services.

Real Estate Activities

Real Estate Residential sector UK House price index 130 • Social distancing and virus fears limit residential transactions. 120 Index (Base = 100 January 2015) • Bank Of England bank rate changes mean many mortgages 110 have been revaluated. 100 • Mortgage repossessions generally halted by Financial Conduct Authority. 90 • Residential house price stagnant in March. 80 • 70 Major estate agencies expected residential property sales to drop significantly. 60 1/1/2010 5/1/2010 9/1/2010 1/1/2011 5/1/2011 9/1/2011 1/1/2012 5/1/2012 9/1/2012 1/1/2013 5/1/2013 9/1/2013 1/1/2014 5/1/2014 9/1/2014 1/1/2015 5/1/2015 9/1/2015 1/1/2016 5/1/2016 9/1/2016 1/1/2017 5/1/2017 9/1/2017 1/1/2018 5/1/2018 9/1/2018 1/1/2019 5/1/2019 9/1/2019 1/1/2020 • Property listing websites are reporting a significant fall in residential property demand. • House prices in the United Kingdom to decline in 2020 according to property experts.

Real Estate Commercial • Demand for warehouse space spikes since mid-March 2020. This has mainly been driver by major supermarkets, online-retailers and pharmaceutical third-party logistic firms. • Real Estate Investment Trusts (REITS) face fall in real estate capital values as social distancing measure affect retail sales and subsequently retail property rental values. • Office space less affected but not immune. Work from home has driven technology integration which may reduce demand for office space in future.

IBISWorld COVID-19 Updates

COVID-19 Updates IBISWorld Industry code IBISWorld Industry Title C17.220 Sanitary Product Manufacturing in the UK C20.510 Explosives Manufacturing in the UK C21.100 Basic Pharmaceutical Product Manufacturing in the UK C26.200 Computer & Peripheral Equipment Manufacturing in the UK C29.100 Motor Vehicle Manufacturing in the UK G47.110 Supermarkets in the UK G47.710 Clothing Retailing in the UK G47.730 Dispensing Chemists in the UK H51.101 Scheduled Passenger Air Transport in the UK H51.102 Non - Scheduled Passenger Air Transport in the UK I55.100 Hotels in the UK I56.101 Full - Service Restaurants in the UK J60.200 Television Programming & Broadcasting in the UK K64.992 Factoring in the UK N79.110 Travel Agencies in the UK N82.200 Call Centres in the UK Q86.900 Diagnostic & Ambulance Services in the UK Q87.300 Retirement Homes in the UK SP0.068 Budget Airlines in the UK SP0.064 Online Travel Agencies in the UK

https://www.ibisworld.com/industry-insider/coronavirus-insights/ IBISWorld COVID-19 coverage