{"id":1136,"date":"2020-06-22T09:48:22","date_gmt":"2020-06-22T08:48:22","guid":{"rendered":"http:\/\/blogs.cardiff.ac.uk\/thinking-wales\/?p=1136"},"modified":"2022-04-13T17:25:09","modified_gmt":"2022-04-13T16:25:09","slug":"covid-19-welsh-economy","status":"publish","type":"post","link":"https:\/\/blogs.cardiff.ac.uk\/thinking-wales\/covid-19-welsh-economy\/","title":{"rendered":"Covid-19 and the Welsh economy \u2013 what the latest indicators tell us"},"content":{"rendered":"\n

Guto Ifan<\/a> and Cian Si\u00f4n<\/a> are part of Wales Fiscal Analysis<\/a>, a research unit within the Wales Governance Centre at Cardiff University. <\/em><\/p>\n\n\n\n

As countries across Europe tentatively emerge from lockdown, they now tread a narrow tightrope. Lift restrictions on economic and social activity too soon, and risk taking one step forwards and two steps back into lockdown. Failing to keep cases and transmission rates of the virus to low levels will also affect people\u2019s willingness to return to pre-crisis behaviours. <\/p>\n\n\n\n

Last week, the minister for the Economy, Transport and North Wales, Ken Skates warned<\/a> that unemployment could reach a scale not seen in Wales for decades. Meanwhile the UK Chancellor, Rishi Sunak is said<\/a> to be drawing plans for a temporary cut to Value Added Tax to stimulate consumption.<\/p>\n\n\n\n

This blog post sets out what we know so far about the impact of Covid-19 on business, the labour market, and the Welsh economy, as Welsh Government lockdown restrictions are slowly eased.<\/p>\n\n\n\n

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Job retention and self-employment\nschemes<\/strong><\/h2>\n\n\n\n

The Coronavirus Job Retention Scheme\n(CJRS), designed to shield firms from bankruptcy and simultaneously shore up\nconsumer spending and tax revenues, has been a cornerstone of the UK\ngovernment’s fiscal response to the crisis. In total, 316,500 employments have\nbeen furloughed in Wales up to 31 May. This amounts to 4.2% of the UK total\nthat could be assigned geographically.<\/p>\n\n\n\n

Around 25.6% of employees in Wales have been furloughed. This is lower than the proportion in the other devolved administrations and each of the nine English regions.<\/p>\n\n\n\n

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The data suggests that the lower rate\nof furloughing in Wales may be explained by the sectoral composition of\nemployment compared to the rest of the UK. A higher share of Welsh employees\nare employed in parts of the economy most associated with the public sector\n(public administration and defence, education, and health and social work),\nwhich have a very low, or no share of employments furloughed across the UK.<\/p>\n\n\n\n

Almost one in five of employments\nfurloughed across the UK were in the accommodation and food services sector,\ndespite this sector accounting for only 15% of UK employees (14% of Welsh\nemployees). The data also suggests that furloughing has been relatively more\nprevalent in wholesale and retail sector as well as the manufacturing and\nconstruction sectors.<\/p>\n\n\n\n

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The rate of furloughing also varies by Welsh\nlocal authority. Conwy has the highest rate of employees furloughed (31%),\nfollowed by Powys, Pembrokeshire, Gwynedd, and Ceredigion (all at approximately\n29%). This compares with 21% in Cardiff, 23% in Neath Port Talbot and 24% in\nSwansea.<\/p>\n\n\n\n

The large rural areas with the highest\nrates of furloughed workers tend to be the most reliant on accommodation and\nfood services, with jobs closely linked to the tourism industry.<\/p>\n\n\n\n

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