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New GDP figures show the economic impact of coronavirus lockdown on retail

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New GDP figures show the economic impact of coronavirus lockdown on retail

New official figures today suggest GDP (gross domestic product) from retail fell by 8.9% in the three months to April 2020 as a result of the Covid-19 lockdown.

 

In the UK non-essential retailers were ordered by the government to close their shops from March 23 to guard against the spread of the coronavirus pandemic. Most can reopen from next Monday with social distancing measures in place, although open air markets and garden centres were able to start trading from June 1.

 

In its latest monthly GDP report, published today, the Office for National Statistics (ONS) estimates that GDP fell by 10.4% in the three months to April 2020, with the services sector - including retail – down by 9.9% over that period. GDP from the retail trade alone was down by 8.9% as many retailers stopped trading, temporarily, in April - as evidenced in the April ONS retail sales figures. Those figures showed overall retail sales falling by 18%, while 30% of sales took place online. They also showed that some retailers temporarily stepped trading altogether, including 39% of department stores, 27.6% of clothing footwear and textile shops, 14.4% of household goods shops, and more than a quarter (28.7%) of specialist food shops.

 

In April alone, today’s figures show, UK GDP was down by 20.4%, while the services sector saw GDP fall by 19%, after falling by 6.2% in March and staying flat in February. GDP from services was down by 24% in April, compared to February,

 

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “April’s fall in GP is the biggest the UK has ever seen, more than three times larger than last month and almost ten times larger than the steepest pre-Covid-19 fall. In April the economy was around 25% smaller than in February. Virtually all areas of the economy were it, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.” He added: “The UK’s trade with the rest of the world was also badly affected by the pandemic, with large falls in both the import and export of cars, fuel, works of art and clothing.”

 

HMRC figures out yesterday also showed that the government had supported the wages of 1.73m workers in the wholesale and retail by the end of May. That included 1.6m who were furloughed through the Coronavirus Job Retention Scheme and 127,000 supported through the Self-Employment Income Support Scheme.

 

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