IBISWorld presents a collection of fast facts that outline how the spread of COVID-19 (coronavirus) has affected the different sectors of the UK economy.

A ‘bounce back’ plan of trade measures for the agriculture, food and drink industry has been announced to help support businesses that have been affected by the coronavirus pandemic.
According to the Office for National Statistics (ONS), agriculture output recorded a 0.3% increase in December 2020 compared with the previous month. Nevertheless, output remained 12% below levels recorded in December 2019.
According to forecasts from the Department for Environment Food & Rural Affairs, disruption to markets due to the coronavirus pandemic contributed to a 21% decline in total income from farming in the United Kingdom during 2020.

Oil prices are unlikely to recover much in 2021 due to the new COVID-19 variant and related travel restrictions threatening already weakened fuel demand.
Oil prices are likely to remain around levels reached in late January 2021 for most of this year, but are likely to fare better towards the end of 2021 when many countries have had the chance to roll out vaccines and start recovering, according to a Reuters poll from 29 January 2021.
Despite some issues with slow vaccine rollouts and new coronavirus variants, brent crude prices increased over January 2021, with output cuts by major oil producers and rising hopes for countries’ vaccination programmes.
Oil & Gas UK still estimate a possible total of 30,000 job losses in the sector by the end of 2021, an estimate that was initially made at the end of April 2020.
According to ONS data, mining and quarrying fell by 1% in December 2020, and has fallen every month since its peak in June 2020, including by 5.9% over the three months through December 2020. Oil and gas extraction has recorded large declines since June due to tightened restrictions.
Following losses recorded by oil companies BP and Exxon, Royal Dutch Shell recorded a net loss of US$21.7 billion (£16 billion) in 2020, due to the slump in demand for oil. As a result, it has said it might take measures to cut production, according to the BBC.

Major aerospace manufacturer Rolls Royce cut 1,400 jobs in November 2020 as part of plans stated in May 2020 to cut 9,000 jobs worldwide, with more than 3,000 of the cuts planned to take place in the United Kingdom. UK supercar maker McLaren also plans to cut more than one-quarter of its 4,000-strong workforce.
According to the ONS, the manufacturing sector grew by 3.3% during the fourth quarter of 2020. Nevertheless, manufacturing output remained 3.5% below levels recorded during the final quarter of 2019. This is symptomatic of an 8.6% decline in production output recorded in 2020.
The IHS Markit/CIPS UK Manufacturing PMI fell to a three-month low of 54.1 in January 2021, from 57.5 in the previous month. The fall in the rate of growth in output can be attributed to temporary supply chain disruption caused by coronavirus-related restrictions. Nevertheless, this represented the eighth consecutive month of growth in output in the sector.
According to the Society of Motor Manufacturers and Traders (SMMT), new car registrations were down by 39.5% in January 2021 compared with the same month in the previous year, as strict public health restrictions led to the closure of motor vehicle dealers' showrooms. This followed a 29.4% decline in vehicle registrations in 2020.
In the ONS Business Insights and Impact on the UK Economy survey, conducted between 11 January and 24 January 2021, 42.5% of participating firms in the manufacturing sector stated that their revenue remained below what they would usually expect for the time of year.

The National Grid recorded a 17.4% decline in operating profit from its UK operations over the six months through September 2020. The company estimates that during those six months, the coronavirus reduced underlying operating profit across its UK and US operations by £117 million, with a £400 million hit expected throughout the full year. Meanwhile, British Gas owner Centrica recorded a 15% decline in electricity demand among business customers during the second half of 2020.
UK energy regulator Ofgem has announced a £96 increase in the default tariff price cap from April 2021. This is in response to rising wholesale prices as a result of a recovery in electricity demand, while £23 of the increase will go towards allowing suppliers to cover bad debts incurred by customers unable to pay their energy bills. According to Citizens Advice, an extra 600,000 household fell into arrears on their energy bills between February and December 2020.
According to data published by the Department of Business, Energy and Industrial Strategy, final energy consumption fell by 18% during the third quarter of 2020, compared with the same period in 2019, while total energy production recorded a year-on-year decline of 8.8%. In conjunction with continued efforts to phase coal out of the UK’s energy mix, lower electricity demand has enabled long coal-free periods since the start of the pandemic, including a record-breaking 67-day period between March and June and a 55-day period between June and August.
According to research conducted by Drax Electric Power, a 6% decline in electricity demand helped renewables overtake fossil fuels as the main source of electricity for the first time in 2020. According to the report, renewables accounted for 42% of UK electricity generation, while fossil fuels accounted for 39.6%.
In the government’s Spending Review 2020, which set out the planned response to the coronavirus pandemic, a total of £12 billion was committed to supporting a green industrial revolution. This includes investment in low-carbon hydrogen production, offshore wind and nuclear power.

According to the ONS, construction output grew by 4.6% in the fourth quarter of 2020. This was despite a 2.9% contraction in December 2020, which left construction output more than 3% below February 2020 levels. Overall, construction output fell by 12.5% in 2020.
The IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) fell to 49.2 in January 2021, from 54.6 in the previous month. This signalled a month-on-month decline in construction output for the first time since May 2020, owing to a renewed fall in commercial activity and a continued decline in civil engineering projects.
In the ONS Business Insights and Impact on the UK Economy survey, conducted between 11 January and 24 January 2021, 40.9% of participating construction firms stated that their revenue remained below what they would usually expect for the time of year.
Problems at major container ports, caused in part by coronavirus-related restrictions, have led to a shortage of key construction materials. According to the Builders Merchant Federation, ongoing shortages of materials could lead to delays to UK housebuilding.
According to the ONS, the number of people employed in the construction sector dropped to its lowest level since 2013 during the third quarter of 2020. This followed a 4% decline in construction employment during the second quarter of the year. From the three-month period between August and October 2019 compared with the same period in 2020, average pay in the construction sector is anticipated to have declined by 2.2%.
Housing starts on site were down by 38% and completions were down 25% between 1 April and 30 September 2020 compared with the same period in the previous year, according to Homes England.

In the ONS’s Business Insights and Impacts on the UK report, published on 11 February 2021, 51.6% of businesses in the wholesale and retail trade reported a decrease in turnover between 11 and 24 January 2020.
According to the SMMT, new car sales fell by 40% in the first month of the year compared to the previous year, due to showrooms being shut as part of the lockdown restrictions, making it the worst start to a year since 1970. Only 90,000 cars were registered during January 2021, compared to 149,000 in January 2020.
The SMMT warns that a lockdown extending through March would be devastating to the industry as March is typically the busiest month for car sellers, accounting for 20% of vehicles sold in the United Kingdom due to new registration plates, according to the Financial Times.
Research by Barclays Corporate Banking and YouGov found that most retailers and wholesalers do not expect their supply chains to return to normal until at least March 2021, with the average length of the supply chain doubling to 10 weeks, compared with the five weeks prior to the pandemic. The research also found that 52% of wholesalers surveyed had cut out the middleman for the first time since the coronavirus outbreak, instead selling directly to consumers.
On 1 February 2021, it was reported that the Federation of Wholesale Distributors had criticised the government for failure to support food and drink wholesalers during the coronavirus pandemic, while at the same time providing significant support to supermarkets. It argues that this assistance could lead to supermarket monopoly, having significant consequences for regional jobs, diversity of supply and consumer choice.

According to law firm, Boodle Hatfield, planning applications for stores drop 22% as retailers focus on digital operations. In the City of London, planning applications for new shops and shopping centres fell by 59%, while York was the city with the largest decline, of 91%. Meanwhile, the latest vacancy monitor from the British Retail Consortium revealed the vacancy rate for retail units across the United Kingdom reached 13.2% in the third quarter of 2020, up from 12.4% in the previous quarter.
In January 2020, online fast-fashion retailer Boohoo agreed to buy the Debenhams brand and website for £55 million, while Asos agreed to acquire Arcadia’s Topshop, Topman, Miss Selfridge and HIIT brands for £265 million in February 2021. Arcadia’s Dorothy Perkins, Wallis and Burton brands were sold to Boohoo. Some design and product-related roles are due to be transferred, but the transactions do not include the group’s 70 stores.
A growing number of retailers are facing financial difficulties as the 12-month interest-free repayment on the Coronavirus Business Interruption Loan Scheme comes to an end in March 2021, mounting rent and a return to full business rates in April 2021. Financial pressures are expected to lead to widespread store closures, unemployment and acquisition activity.

All international arrivals to the United Kingdom are currently required to quarantine for 10 days, with travellers also asked to provide proof of a negative PCR test taken in the 72 hours prior to travelling. Meanwhile, the government has confirmed a list of 33 countries from which travellers will be refused. Any travellers who cannot be refused entry are required to isolate in government-approved accommodation for 10 days. These new tougher measures have led to further calls from industry leaders for more government support for the UK’s aviation sector.
Major UK airline easyJet reported a 53% decline in passenger revenue over the 12 months through September 2020, a result of a 47.5% reduction in capacity due to the coronavirus outbreak. A £1.3 billion loss recorded by the airline adds to a £5 billion nine-month loss recorded by British Airways and Aer Lingus owner, International Airlines Group, to bring coronavirus-induced losses for UK airlines to almost £7 billion. Meanwhile, in January 2020, British Airways received £2 billion of government loans in order to enhance liquidity and provide operational flexibility in 2021.
The Department for Transport will extend the waiver to ‘use or lose’ rules on airport slots through the summer season, allowing UK airlines to hold on to lucrative airport slots without using them.
According to the Civil Aviation Authority, the number of terminal and transit passengers at all UK reporting airports declined by 89.9% in December 2020 compared with the same month in 2019. The number of passengers passing through UK airports fell by more than 75% in 2020 compared with the previous year.
In the ONS Business Insights and Impact on the UK Economy survey, conducted between 11 January and 24 January 2021, 46% of firms in the transportation and warehousing sector reported that their revenue was lower than would normally be expected for the time of the year.

England entered a third national lockdown on 5 January 2021, with a date for reopening yet to be announced. Scotland, Wales and Northern Ireland all increased restrictions at the end of December 2020 and the start of January 2021, with hospitality venues heavily affected.
Under the lockdown rules in England, restaurants, pubs and bars must close, with only takeaways and delivery operating as normal. However, takeaways of alcohol have been banned, but it can still be delivered. Holiday accommodation must also close, but they can offer accommodation to essential customers, such as people staying for work. Hotels and other accommodation providers can also serve food to guests until 10pm.
Accommodation and food services fell by 32.8% in the fourth quarter of 2020, due to the reintroduction of restrictions, according to the ONS.
There has been a surge in demand for staycations since the start of the coronavirus pandemic, a trend that is expected to continue in 2021 due to continued high restrictions in place at the start of the year. In February 2021, ministers warned people against booking holidays until there is a plan for reopening the economy, drawing criticism from the travel industry.
In late January 2021, the Financial Times reports that UK holiday accommodation prices are surging, due to international travel restrictions and issues with the EU’s vaccine rollout reducing confidence in foreign holidays. For example, property management service Guesty states that the ‘average nightly rates for short-term rentals and independent hotels in the UK were up 59% for June this year compared with June 2020, while prices for July and August were currently more than 38% higher than last year’, as reported by the Financial Times.
On Monday 18 January 2021, the United Kingdom closed all travel corridors in order to tackle the spread of yet unidentified new strains of coronavirus that could be taken into the United Kingdom from overseas. This would deal a blow to the already battered accommodation sector.
A hotel quarantine programme came into force on 15 February 2021. Passengers arriving into England from a list of 33 high-risk countries must quarantine in a hotel for 10 days, at their own expense of £1,750, by booking a room through a government portal.
VisitBritain has stated that it expects a £30 billion decline in domestic tourism spending in 2021 compared with 2019, equating to a 33% drop. Nevertheless, the 2021 forecast is 79% higher than in 2020, when operators lost on revenue due to the initial lockdown that covered Easter and the May bank holidays.

‘Buy now, pay later’ schemes face regulation from the Financial Conduct Authority (FCA) to stop young individuals entering into debt. Buy now, pay later schemes popularity increased sharply in 2020 as Instagram influencers promoted the services. An estimated £4 in every £100 spent in the United Kingdom uses buy now pay later.
The FCA has warned that up to 4,000 financial service firms are at heightened risk of failure due to dwindling cash reserves, borrowings and liquid assets as the result of the coronavirus pandemic. Out of the 17,000 survey respondents, 60% of firms said they expected the pandemic to have a negative impact on their net income. However, almost 700 firms said their income would fall by more than three-quarters.
The FCA has classified peer-to-peer lending sector among high-risk investments. The move comes after the regulator said it opened more than 1,500 supervisory cases involving scams or higher risk investments and received more than 24,000 reports of unauthorised activity and published over 1,000 consumer alerts in total over 2020, an 82% increase over the previous year. Of the 131,458 complaints opened about investment products during the year, FCA figures indicate approximately 5,511 were about P2P lending.
The UK Supreme Court ruled business interruption policies provided cover against pandemic and government lockdown measures. As a result, policyholders will be able to claim for losses caused by the presence of coronavirus in their local area and government guidance to close their premises, even though this was not a legal requirement at first. Figures from the Association of British Insurers during the first lockdown in 2020 put the total cost of UK business interruption claims at £900 million.

According to Nationwide, annual house price growth slowed to 6.4% in January 2021 year-on-year, from 7.3% in December 2020, with prices down 0.3% month on month as the end of the stamp duty holiday nears. This marks the first fall since June. The average house price fell to £229,748.
Nationwide states that the end of the stamp duty holiday and weaker labour market conditions in the coming months could sharply slow housing market activity. Halifax and the Office for Budget Responsibility expect house prices to fall over the year. Nevertheless, shifts in housing preferences could continue to provide some support for the market.
In an effort to protect tenants during continued high restrictions and tough financial situations, the ban on evictions in England is to be extended until the end of March 2021. Previously, the eviction ban was set to end on 11 January but was extended to 22 February 2021.
In February 2021, Zoopla reports that rents in Greater London fell by 8.3% in 2020, marking the steepest decline since the financial crisis, and also fell in big cities including Manchester, Birmingham and Edinburgh. Demand for city-centre properties has taken a hit as consumers shift preferences to larger homes in surrounding boroughs.
A Financial Times article from the start of December 2020 states that UK commercial landlords, including Legal & General and the Royal Festival Hall, have begun taking unpaid rent from tenant deposits in an attempt to recoup unpaid rent and bypass the government’s ban on legal action to recover rent owed.
On 9 December 2020, the government announced it would extend its ban on evicting commercial tenants until 31 March 2021 due to the economic difficulties presented by the pandemic and subsequent restrictions imposed to limit its spread. The British Retail Consortium has stated that 80% of UK retail tenants have reached agreements with their landlords to pay off rent arrears, while UKHospitality estimates that 50% of hospitality and leisure tenants have reached agreements to defer or waive rents, as reported by the Financial Times.

According to ONS data, the services sector’s output grew by 1.7% in December following the easing of restrictions. The services sector has fallen by 8.9% over 2020 and is down 6.9% compared with pre-pandemic output in February 2020. This represents a larger gap than in other sectors.
Some consultancies have benefited from businesses seeking to understand the economic impact of the coronavirus pandemic on their operations and needing advice on how to deal with the challenges. However, plummeting business confidence and revenue are expected to lower budgets and spending, reducing demand and fees. Low consumer spending on non-essential services is also expected to contribute to the drop in demand.
Following calls for HMRC to extend the tax return deadline, the tax authority has decided to waive penalties for late filing of personal tax returns. However, people have still had to pay by 31 January, but can submit paperwork by 28 February 2021. Those that had not completed their return were still required to pay an estimated amount based on their income.
HMRC figures show that a record 1.8 million people missed the 31 January 2021 deadline to submit their UK personal tax return, nearly double the number in the previous year. Although the automatic £100 penalty on late returns has been waived by HMRC, the 2.6% annual interest on late payments is still imposed.
Despite VAT fraud risk, HMRC has greatly reduced checks on online sellers, with just 80 data requests sent to platforms between April 2020 and December 2020, compared to 2,684 requests in 2019-20. HMRC has stated that this is due to resource reallocation to manage coronavirus support schemes, as reported by the Financial Times.
Law firms in the City of London are seeking to ditch trophy offices due to the shift to remote working during the pandemic. As reported by the Financial Times, firms project a reduction in floorspace by as much as 50%, with many embracing a permanent shift to homeworking.
Since the start of the coronavirus pandemic, 72% of barristers in England and Wales have experienced a significant reduction in new fee income, according to the Bar Council, which represents over 16,500 barristers. Those barristers involved in criminal work are likely to be harder hit, as many criminal trials have been unable to take place during the pandemic. The number of trainees also fell by 35% in 2020, according to the Bar Standards Board.
The FCA calculates that up to 4,000 financial services firms are at a high risk of failure due to the coronavirus. According to a FCA survey, reported in the Financial Times at the start of January 2021, out of the 17,000 companies that responded, 60% expected the pandemic to have a negative effect on their net income, with most estimating a decrease of between 1% and 25%, while approximately 700 firms expect a decline of over 75%.

The NHS plans to copy the flu prevention programme with a mass campaign of booster jabs against new variants of COVID-19 every autumn. The timing of the extra vaccinations means they could be delivered alongside the annual seasonal flu vaccinations long offered to over-65s, and for which eligibility was last year extended to all over-50s.
As of 15 February 2021, more than 15 million people, or 22% of the UK population, have received their first dose of the vaccine. The figure includes most people in the government’s top four priority groups, including the over-75s, frontline healthcare workers, and nursing home staff and residents. Over 537,000 of them have also received their second dose. The rollout in England has officially been expanded to those aged 65 and over and younger people in at-risk groups.
UK government to give itself powers to bail out social care companies. The Secretary of State for Health and Social Care is already allowed to make emergency payments directly to non-profit providers in financial trouble, but draft legislation on reforming the NHS proposes extending this to private sector owners of companies that run residential care facilities or provide nursing services for the elderly and disabled in their own homes.
NHS waiting lists for routine operations continue to grow. Data from NHS England data indicates almost 225,000 people in England have now waited more than 12 months for routine hospital treatment, the highest number since April 2008.

Novelty series and film releases are expected to bolster revenue for the Video Downloading and Streaming Services industry as membership prices rise to cover costs. For instance, Netflix is increasing UK subscription prices by up to £24 a year, as the platform has unveiled its original content plans for the next 12 months. The standard monthly plan, which allows users to watch in High Definition and stream to two screens simultaneously, will increase from £8.99 to £9.99. Meanwhile, the Premium tier, which includes streaming in Ultra HD on up to four screens at the same time, will jump from £11.99 to £13.99.
UK gyms and fitness centres continue to struggle, losing approximately £400 million a month due to declining membership numbers and fees, according to UK Active. For instance, the Gym Group reported a 47.4% decline in revenue over 2020, with members falling from 749,000 to 578,000. As a result, UK Active has called for sector-specific assistance.

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