20.4% plunge in output

Sectors may need ‘open-ended’ support as GDP slumps

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Construction was among the hardest hit sectors (pic: Terry Murden)

A business group said today that some sectors will require ‘open-ended support’ for some time as a 20.4% crash in GDP spelled out the scale of the recovery task facing the government.

The data for April – the worst-ever monthly figure – confirmed the severe battering expected from the coronavirus pandemic after the economy was almost completely shutdown. City economists had forecast an 18.4% decline.

British Chambers of Commerce head of economics Suren Thiru said that with impact being felt across many sectors the prospect of a V-shaped recovery now looked unlikely.

The London stock market plunged on opening, but later recovered, and the FTSE 100 was more than 80 points higher in mid-morning trade.

The April GDP figure follows a 5.8% fall in March. Construction, hospitality, manufacturing, retail and travel were among the hardest hit sectors.

Industrial output fell 20.3%, the largest monthly fall since records began in 1968. Services output was down 19% and construction output plummeted 40.1% – all worse than expected. Within industrial output, manufacturing plunged 24.3%.

The public administration and defence sector was flat, while financial and insurance activities only fell 5.3%.

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The UK economy shrank by 10.4% in the three months to April, the ONS’s rolling three-month estimate showed.

ONS statistician Jonathan Athow said the April figure was almost ten times larger than the steepest pre-covid-19 fall. In April the economy was around 25% smaller than in February.

He added: “Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall.

“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, fuels, works of art and clothing.”

British Chambers of Commerce head of economics Suren Thiru said: “With a monthly fall in UK GDP over thirty times the average month on month decline during the global financial crisis, the economic impact of Coronavirus has been put into sharp relief. 

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