Coronavirus (COVID-19) roundup, 7 to 11 September 2020

This page contains data and analysis published by the Office for National Statistics (ONS) from 7 to 11 September 2020. Go to our live page for the most up-to-date insights on COVID-19.

11 September 2020

GDP, July 2020

Monthly gross domestic product (GDP) grew by 6.6% in July 2020 as lockdown measures continued to ease. This follows growth of 8.7% in June and 2.4% in May and a record fall of 20.0% in April 2020. Today’s GDP monthly estimate release captures the direct effects of the coronavirus (COVID-19) pandemic and the government measures taken to reduce transmission of the virus.

July 2020 GDP is now 18.6% higher than its April 2020 low. However, it remains 11.7% below the levels seen in February 2020, before the full impact of the coronavirus pandemic was felt.

GDP fell by 7.6% in the three months to July 2020, with declines across all main sectors of the economy. This follows the two consecutive falls in Quarter 1 (Jan to Mar) 2020 and Quarter 2 (Apr to June) 2020, as government restrictions on movement dramatically reduced economic activity.

11 September 2020

Services, production and construction

There was widespread growth in services, production and construction during July 2020. However, the Index of Services, Index of Production and Construction output all remained well below their February 2020 levels.

A detailed analysis of the impact on the output of businesses has been published in Coronavirus and the impact on output in the UK economy: July 2020.

The output of service industries remained 12.6% below the level of February 2020, growing by 6.1% in the latest month. In particular, travel- and holiday-related industries were still considerably lower than February 2020, as were those industries still impacted by social distancing, such as hotels and accommodation and food and beverage services.

All sub-sectors of services showed an increase in growth in July 2020; however, output did not recover to pre-COVID levels in February 2020

Monthly output (March, April, May, June and July 2020) as a proportion of February 2020, February 2020 output = 100%

Notes:

1. Chart shows the March, April, May, June and July output as a proportion of February 2020 where February output equals 100%
2. Public Administration and Defence output saw marginal positive growth across March, April, May, June and July 2020 so output to February 2020 is over 100%

The production industries remained 7.0% below their February 2020 level, even after growth of 5.2% in the latest month, with manufacturing declining by 8.7% since February 2020 and growing by 6.3% since May 2020.

All sub-sectors of manufacturing showed an increase in growth in July 2020; however, output had still not recovered to pre-COVID levels in February 2020

Monthly output (March, April, May, June and July 2020) as a proportion of February 2020, February 2020 output = 100%

Notes:

1. Chart shows the March, April, May, June and July output as a proportion of February 2020 where February output equals 100%
2. The volatile Manufacture of Basic Pharmaceuticals industry had higher output in April, May and June 2020 than February 2020, so the proportion is over 100%.

Construction output grew by 17.6% in July 2020, following the record monthly growth of 23.5% in June 2020. The growth in July 2020 is now the third consecutive month of growth since the record monthly decline of 40.2% in April 2020.

Total construction output in July 2020 is 11.6% lower when compared with February 2020. While there has been continued increase in activity across the sector, health and safety measures – such as social distancing – where businesses are working on premises and sites, have meant that the capacity and level of output are not at the same level of work prior to the coronavirus pandemic.

11 September 2020

UK trade

Falls in imports and exports in the three months to July 2020 are detailed in today’s UK trade publication. Underlying imports fell by £8.5 billion in this period, while exports decreased by £2.7 billion. This has resulted in an increase in the total trade surplus, excluding non-monetary gold and other precious metals, to £6.4 billion.

The largest falls in both imports and exports of goods in the three months to July 2020 were seen in machinery and transport equipment, and fuels, which can be linked to the sharp drop in demand for road vehicles and oil due to coronavirus-related restrictions.

Road vehicle exports to non-EU countries fell £1.0 billion in the three months to July 2020, largely due to falling United States (US) demand. This could be due to the US having the highest number of COVID-19 cases globally.

Road vehicle imports fell £1.1 billion in the three months to July, following a £2.6 billion fall in imports in April 2020 as dealerships were closed due to lockdown measures. In June and July 2020, imports increased on a monthly basis as dealerships re-opened across the UK. However, new car registrations were still down by 41% in July, on a year to date basis.

10 September 2020

Returning to work, household finances and anxiety

Our latest bulletin on personal and economic wellbeing in Great Britain during the coronavirus (COVID-19) pandemic explores how different people fared as lockdown restrictions eased, using results from the Opinions and Lifestyle Survey (OPN). OPN has been collecting data on the impact of COVID-19 on day-to-day life in Great Britain since 20 March 2020.

During June and early July 2020, more people returned to work, particularly those in the £10,000 to £20,000 income bracket. However, since mid-July, when three out of four employed people were back in work, this trend levelled off – though may be due to some people taking time off in the summer. Despite the gradual easing of lockdown restrictions, the number of people who thought that it would take more than a year for things to return to normal, if at all, started to increase again during July.

The bulletin also looks at how people fared financially. Around one in four people in employment reported reduced household income at the end of May, which declined to one in six and then stayed flat from mid-July.

At the end of July, more people expected it to take more than a year or never for life to return to normal, compared with mid-June

Share of the population on when they think their own life will return to normal, Great Britain, 27 March to 26 July 2020

While improvements in finances stalled, financial resilience worsened throughout July, with one-third of the population reporting they were not able to find money for an unexpected but necessary expense by the end of the month. Parents and renters fared worse in this regard with around half of them unable to cover such an expense by the end of July, possibly because both groups were more likely to report reduced hours and not being able to work from home.

With regards to personal well-being, survey respondents were asked questions such as “overall, how anxious did you feel yesterday?” The findings showed that there was a general increase in anxiety into July across the nation, particularly for those who are disabled, feel unsafe to go outside, or suffer with health conditions.

8 September 2020

Business expectations compared with reality

Nearly half of businesses were overly optimistic about their turnover between 1 June and 23 August 2020, according to our analysis.

Comparing business expectations of their turnover with subsequent results – using responses to Waves 6 to 11 of the fortnightly Business Impact of Coronavirus (COVID-19) Survey (BICS) – we found that 48% of businesses reported turnover below their previous expectations. In contrast, just 10% of businesses outperformed their expectations.

Business turnover has been more likely to underperform than overperform, compared with expectations

A combination of Wave 6 to Wave 11 responses, count of responding businesses currently trading, broken down by previous expectations and actual responses, UK, 1 June to 23 August 2020

Businesses are clearly finding it difficult to predict outcomes during the coronavirus pandemic – one in three (33%) firms in our sample were consistently inaccurate with their turnover expectations, compared with one in six (16%) that were always correct.

By industry, businesses in accommodation and food service activities were most likely to underperform compared with expectations.

8 September 2020

Mergers and acquisitions

Mergers and acquisitions involving UK companies: April to June 2020 contains estimates for the value and number of transactions that result in a change of ultimate control of the target company.

During Quarter 2 (Apr to June) 2020, the estimates for the value of outward mergers and acquisitions (M&A) involving UK companies increased slightly, while both inward and domestic M&A saw notable decreases when compared with Quarter 1 (Jan to Mar) 2020.

As these statistics only measure completed transactions, they cannot provide evidence to explain a reduction in the number of transactions. However, the timing does follow the introduction of the restriction of movement in the UK, which began on 23 March 2020 in response to the coronavirus (COVID-19) pandemic.

There were expectations from external commentators that pandemic-related factors could cause delays to mergers and acquisitions transactions. A Bank of England report stated that there had been “a sharp fall in transactional business, such as mergers and acquisitions”. Bureau van Dijk reported a worldwide reduction in the number of announced deals in Quarter 1 2020, continuing into April 2020, and that “while some have pressed the pause button on planned transactions, others have opted to call off intended combinations altogether”.