THE DRAMATIC economic decline in April shows the scale of support that will be needed to get the economy back on track, business leaders in Coventry and Warwickshire have said.
The Coventry and Warwickshire Chamber of Commerce responded to the news that Gross Domestic Product (GDP) dropped by 20.4 per cent in the UK in April when the country was in full lockdown, following significant falls in March.
The Chamber’s chief executive Louise Bennett said a sharp drop had been anticipated, and that it served as a reminder of the challenge businesses are facing.
She said: “A big fall in GDP was expected in April as it was a whole month when the economy was on pause due to the measures being taken to stop the spread of Coronavirus.
“However, seeing just how big a drop it is and the fact it’s so much sharper than anything we saw during the financial crash a decade ago is a stark reminder of the economic damage that has been done.”
She said that the economy was beginning to restart, but it would be a slow recovery compared to the sudden shock that has been felt.
“That is why it is so important that businesses continue to get support from Government” she said. “The help so far has helped many to survive but more is going to be needed to help rebuild our economy.
“We’ve recently written to all of our local MPs to highlight the help that is going to be needed in the tourism, leisure and hospitality sector and that are other elements of the economy too that are going to need focussed support too.”
She added the Chamber would continue to support and connect businesses to increase trade between regional companies – as well as help them to capitalise on overseas trade.
British Chambers of Commerce head of economics Suren Thiru said: “With a monthly fall in UK GDP over 30 times the average month-on-month decline during the global financial crisis, the economic impact of Coronavirus has been put into sharp relief.
“With lockdown restrictions gradually easing and shops beginning to reopen, April is likely to prove to be the low point for the UK economy. However, any prospect of a ‘V-shaped’ recovery remains unlikely, with many sectors continuing to operate at reduced capacity.
“Some firms, including those in our hospitality, leisure and tourism industries, may remain closed for some time and will require flexible and open-ended government support to weather the economic storm.
“Over the coming months, further action will be needed to limit the long-term economic damage and kickstart a recovery, including closing gaps in government support and providing incentives to help stimulate consumer demand and business investment.
“Establishing air bridges between countries with low infection rates would provide a much-needed boost to key parts of the UK economy.”