East ‘has potential for strong recovery from covid’ report suggests
- Credit: Archant
Economic output in the East of England is set to recover faster than the UK average in 2021, a study suggests.
An Economic Outlook report commissioned by chartered accountancy body the Institute of Chartered Accountants in England and Wales (ICAEW) reveals that although economic output in the East of England will fall slightly more than the UK average in 2020, it should recover faster than elsewhere next year.
But there may still be some problems on the horizon, the study suggests, with the number of people employed in the region in 2021 falling slightly from pre-pandemic levels.
MORE – Workers may put off retirement to help pension pots recover from covid crisis, expert suggestsBusinesses in the East of England are also vulnerable to the result of talks between the UK and the European Union (EU), as two thirds of goods imported into the region come from the EU, it said. This could leave many businesses unable to import components and parts for their products following the end of the transition period.
The report found sectors that had to shut during lockdown – such as restaurants and airlines – were badly hit by the pandemic. Manufacturers dependent on global supply chains, or where demand fell sharply, were also affected.
Richard Holt of Oxford Economics said: “The East of England includes some sectors such as food manufacturing and pharmaceuticals that have been relatively resilient during the pandemic and others such as vehicle manufacturing that have faced particular challenges. The government’s Industrial Strategy, and its EU trade negotiations, need to take account of all sectors of the economy.”
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Harpreet Panesar, ICAEW regional director for the East of England, said it had been a difficult year, but the East of England “has the potential for a strong recovery”.
But government needed to continue to support firms still struggling, especially where further lockdowns were imposed, he said.
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“Without support, we may lose that strong recovery and the region’s economy will stay depressed,” he said.
“The chancellor’s autumn budget should be a social, education and industrial strategy which combines protection and re-training for displaced workers over the short and medium term, with intervention and investment to create jobs with a future, especially in the green and scientific sectors.
“The furlough scheme did a good job of keeping staff attached to employers while unable to work. We now need to see the government bring forward ways to support people back into their workplaces through the short-term economic uncertainty ahead.”