27 Aug 2021

Reading's economic recovery: 18 months on

Reading Festival is back this weekend - bringing some 100,000 music fans to town and an estimated £13 million into the local economy. So, is this a real sign that we might finally be getting back to 'normal'? Reading UK's very own Economic Development Manager, Sue Brackley, shares her thoughts on Reading's recovery 18 months into the Covid-19 pandemic, and what the future looks like for our town's economy.

Oracle riverside

 

Reading UK has been tracking the performance of our local economy since lockdown started back in March 2019 and the results have been, quite literally, a rollercoaster over the last 18 months. However, this month is the first time all the indicators are set to “green” - a sign that our economy is, at least, beginning to show signs of recovery.

The claimant level has dropped by 1,000 since March 2020 (now at 6,160). There are more jobs (nearly 6,000) being advertised across every sector in the region, including hospitality and retail. We are seeing more people using the buses and trains, and, crucially, we are also seeing an increase in footfall, meaning there are more people visiting and using Reading town centre.

However, while these are very promising signs of recovery, we must also add a note of caution on the bigger picture (sorry!).

While the ONS has widely reported record numbers of jobs being advertised (Reading alone has 700 more jobs advertised this month) there are two serious issues to consider. Firstly, the reality of skills gaps (especially for older workers) means that our unemployed people are not necessarily being matched to the available jobs. Secondly, the labour shortage is already leading to higher wages which, although a good thing in principle, can also seriously impact inflation. Combined with the Purchasing Managers Index Report that businesses are facing record shortages of staff and materials, there are clearly some difficult barriers to recovery, which will require some serious interventions.

There are also concerns about the level of CVLs (Voluntary Liquidation), which are now back to pre-Covid levels and likely to increase as government support ends this month.

House prices have also seen some rapid rises (a 13% increase in the southeast to year ending June ‘21). On the surface this is good news but will inevitably have impact on the affordability of the area, as well as widening inequality. Centre for Cities recently reported on "The Uneven Recovery", showing that during lockdown, those with high disposable income (15% of Reading’s workers) have been able to save and reduce debt levels (£10billion has been wiped off household debt in the UK), whereas people in lower skilled jobs have faced spiralling costs and now find themselves in debt as they haven’t been able to work. This is a timely reminder that Levelling Up is not a north/south issue!

All the gradual steps to recovery for Reading are, of course, cause for optimism, but we’re still some way off pre-Covid levels, and September is likely to be a watershed. Locally, as predicted by most agencies, we are bouncing back well, in fact some sectors are thriving. However, we still face wider challenges to recovery at national and local level (only 30% of our workers are back in the town) which we need to resolve to ensure an economic recovery that works for everyone.  

Find out more about Reading UK's four-year partnership plan, Powered by People, designed to recover our town's economy and rebuild a better, stronger Reading, fit for the future.


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