Economic Insights – Part Two

Since the last webinar, IBISWorld have further downgraded consumer confidence. 2020-21 average is expected to be approximately 76.4 index points. This comes as the strain hits businesses and more workers put onto furlough. A further fall is possible depending on longevity of COVID-19.

Written on April 6, 2020 by Xeinadin Group


Construction has suffered a sharp fall in activity during March and has seen the steepest reduction of staff numbers since September 2010. The most affected industries are; Residential building construction, Commercial building construction and Civil engineering.

IBISWorld has downgraded revenue expectations for FY2020 and FY2021.

Retail & Leisure

Low manufacturing output coupled with decreased demand has been felt throughout the industry, demonstrated by a 0.8% fall in retail prices in the first week of April when compared to the same period last year, according to the British Retail Consortium. This is causing retailers to become increasingly reliant on government support with companies such as Debenhams considering entering administration.

Supermarkets have however benefited from the crisis. The CBI Grocery Sales Index has increased from 29 points in February to 90 points by the 24th March.

Automotive Industry

The automotive industry has been hit heavily by COVID-19. A complex global supply chain for motor vehicles that relies on just-in-time manufacturing adds complexities that have resulted in decreased revenue forecasts.

New registrations have seen the sharpest fall for two decades. The drop has been 44.4% in March when compared to the previous year. For export markets, this is expected to weigh in on overall demand for manufacturers who will see decreased demand.

As lockdown is expected to continue, automotive industries are expected to feel the effects throughout the start of the financial year.

Most Affected Industries2019/20 Revenue Growth2020/21 Revenue Growth
New Car & Light Motor Vehicle Dealers3.4%2.2%
Used Car & Light Motor Vehicle Dealers2.4%1.6%
Motor Vehicle Manufacturing4.7%2.2%

Financial Sector

On 27th March, the credit rating agency, Fitch, reduced the UK’s credit rating from AA to AA-, citing significant weakening on U.K. finances caused by the COVID-19 outbreak and future uncertainty surrounding Brexit. A link to the full article is below.

Learn more:

Commercial banks are now becoming concerned about the risk level in their loan portfolios.

Supply Chain Exposure

Due to supply chains being global and COVID-19 being present in most countries, supply chains have suffered and pose a significant risk to many industries. Some of the most severely at risk industries are those containing electronic components due to the heavy reliance on China in the supply chain. Other notable industries that are affected include; Watch & Jewellery Wholesaling & Repair, Pharmaceutical Preparations Manufacturing and manufacturing industries that rely on imported inputs.

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