Media Release

Revealed: the places facing the worst economic hit from the pandemic

The local areas facing the most severe impact on jobs from the coronavirus downturn are revealed in Social Market Foundation research published today.

A new report from the SMF identifies the places at greatest risk of economic disruption over the next three years – and the areas that will find it hardest to recover. Many are in the regions that the Government has promised to support, leading the think-tank to warn that the downturn will “level down” the economy in some places.

The think-tank’s analysis shows that the places facing the worst economic shock from the pandemic are mostly in London and the south-east of England.

But the study suggests that those places will bounce back relatively quickly. The places that face a severe economic shock and then a slow recovery are mostly away from London and include some of the “Red Wall” constituencies that changed hands at the general election.

The city of Hull is the local area that faces the worst economic impact and the slowest recovery, according to the SMF, a cross-party think-tank.

The analysis is based on an assessment of which economic sectors face the greatest disruption in the years after the pandemic. Industries such as finance and construction (which together employ more than 7.7 million people) face the most severe impacts. By contrast, the public administration, health and employment sector (which provides 9.5 million jobs) faces only a mild impact.

The SMF calculated the proportion of jobs in each local area in the different economic sectors to identify the places facing the most severe shock. On that measure, the ten most vulnerable places are (NUTS3):

  • Camden & City of London
  • Kingston & Chelsea and Hammersmith & Fulham
  • Lambeth
  • East Lancashire
  • Hounslow and Richmond upon Thames
  • Ealing
  • Tower Hamlets
  • Westminster
  • Swindon
  • West Essex

But based on the recovery from the global financial crisis and their unemployment levels before the pandemic, the SMF said many of those areas will bounce back relatively quickly.

Taking account of pre-existing unemployment and previous recovery times, the SMF found that the places that face the biggest economic hit and the slowest revival are:

Top 10 severely impacted areas with the highest pre-crisis unemployment (NUTS3)

  • Kingston upon Hull, City of
  • Bradford
  • Walsall
  • Manchester
  • Peterborough
  • Lambeth
  • Thurrock
  • Brent
  • Redbridge and Waltham Forest
  • Sandwell

For a complete, searchable list of impact by NUTS3 areas, visit www.smf.co.uk/publications/levelling-down 

“After the financial crisis, London recovered quickly because of a concentration of jobs in banking and insurance. Whilst these jobs will face the biggest initial blow from coronavirus, evidence suggests the capital is more economically resilient and the labour market will recover quicker than the rest of the country”, the report says.

“As the Government tries to get its economic agenda back on track, it needs to be aware of those areas with multiple moderate or severe impact industries which could equate to a spike in localised job losses. This will be compounded if these areas had high pre-crisis rates of unemployment”.

The report also shows which demographic groups are most likely to work in the most vulnerable sectors, and so face the greatest economic threat from the pandemic:

  • Age

Those aged 20 to 24 are the least likely to work in industries facing a mild impact from coronavirus: only 24% are in mildly impacted industries. On the other hand, almost four in ten (38%) of those aged 50 to 59 are in mildly impacted industries.

  • Sex

Almost half (47%) of women work in industries that will face only a mild impact in the medium term. Only 19% of women work in severely impacted industries. By contrast, only 21% of men work in mild-impact sectors. Almost half of men (49%) work in industries facing a moderate impact and one in three (30%) work in industries likely to face a severe impact.

  • Race

White and British Indian people are the most likely to work in industries expected to face a severe impact from coronavirus. Black Britons are the most likely to work in mildly impacted industries (43%). This compares to 29% of British Indians and 28% of Britons of Pakistani or Bangladeshi heritage.

  • Education

Those with A-levels or equivalent or a Degree or equivalent are the two groups most likely to work in industries deemed to face a severe impact (26% for both). However, those with a degree are also the most likely to work in industries deemed to be of low impact (43%).

The report, entitled Levelling Down – The medium-term local economic impact of coronavirus, is published by the Social Market Foundation at 0900 on Monday 6 July at www.smf.co.uk/publications/levelling-down

Amy Norman, SMF researcher said:

“Policy makers need to recognise that national or even regional data can conceal the local realities of this recession and should not rely on it when making important decisions for the recovery from coronavirus.

“The economic severity of coronavirus will be felt across many places, but we must remember that this recession does not occur in isolation. Many people and places outside of the capital will be particularly vulnerable due to the lasting hardships of the past decade.

“Young people’s jobs are most at risk, but a quarter of older workers also face job instability. Politicians have announced the guaranteed youth opportunity but are light on support for those in older categories who will find themselves out of work.”


Notes

The report presents a complete ranking of NUTS3 areas from most to least severely impacted by the virus. A full list of areas can be found in the report published at www.smf.co.uk/publications/levelling-down

 

Contact

Linus Pardoe – SMF Impact Officer, 07402 576995, linus@smf.co.uk

James Kirkup – SMF Director, 07185 706601, james@smf.co.uk

 

About the SMF:

The Social Market Foundation (SMF) is a non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. The SMF retains complete editorial independence of its publications.

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