Monday 11 May 2020 3:33 pm

Coronavirus lockdown: Economic activity and optimism plunge to record lows

Economic activity and optimism levels both plummeted to record lows last month due to the UK’s coronavirus lockdown.

Business output across the UK fell by 35.87 points in April to 44.9, significantly below the 79.28 recorded after the global financial crisis, to the lowest level since records began in 2005.

Read more: UK social distancing eased under lockdown exit strategy

Any reading below 95 points on the business output index represents a contraction.

The latest research by BDO showed that lockdown measures implemented on 23 March led to an “unprecedented” drop in economic activity, driven by a slump in the services sector.

The government has today published a plan to exit the coronavirus lockdown. More people have been told to go back to work if they can not work from home. 

The “roadmap” to lift coronavirus lockdown restrictions unveiled today also said that some non-essential retailers could reopen by 1 June at the earliest. Hospitality venues will have to wait until at least 1 July before they can reopen. 

Meanwhile, the optimism index also fell in April, dropping 17.07 points to 73.08. This is the lowest score recorded, and is below the previous record of 79.64, which was recorded in February 2009 during the aftermath of the financial crisis. 

BDO’s employment index also fell from 102.99 points in March to 96.18 points in April as the number of Universal Credit declarations increased to 2.3m between 16 March and 28 April during the coronavirus lockdown.

BDO partner Kaley Crossthwaite said: “The speed and scale of the economic downturn generated by the coronavirus crisis is unprecedented.

Read more: Coronavirus lockdowns: Which countries have relaxed social distancing measures?

“As the Government launches its strategy to gradually lift lockdown over the coming weeks and restart the economy, these figures show the enormity of the task it faces. 

“Firms across all sectors have shown their ability to adapt to the evolving situation, but it will require a sustained collaborative effort from politicians and businesses in order to get the economy moving and protect jobs.”

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