Lockdown: Summer easing helped Welsh economy bounce

The Welsh economy bounced back when lockdown restrictions were eased last summer, latest figures show.

The gross domestic product (GDP) for Wales saw a 14.4% rise for the months between July and September, compared with the previous three months of 2020.

The biggest winner was accommodation and food services, which leapt 302.5%.

But the overall increase in Wales was less than in England, Scotland or Northern Ireland.

The GDP measure, which looks at the amount of goods and services delivered in Wales, was also still in negative figures compared with 2019, at a growth rate of -6%.

It is slightly better than the UK average, which stood at -7.5%, compared with the same period the year before.

The boost to accommodation and hospitality in Wales was the second highest rise in the UK, just pipped by south-west England.

But the leap reflects the fact that the entire sector was completely closed when the first coronavirus lockdown was introduced last March.

Elsewhere in Wales, construction saw the next biggest growth - up by 30.9% on the months March to June 2020.

The retail and wholesale sector also felt the bounce, up 25.7% on the previous lockdown months, while manufacturing output also increased by 16.1%.

One of the only fallers in the quarter was agriculture, forestry and fisheries, where growth was negative, at -1.0%.

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The latest GPD figures from the Office for National Statistics are reflected on the ground across Wales.

That first complete lockdown cost Tom Creed's design, build and engineering business £300,000 in March 2020.

"Fortunately, we retained enough work to be able to go through the period and we're in a position now where we've built that order book back up," said the Cardiff-based businessman.

"Understandably, people at the time were nervous about what was going to happen with the economy so pulled the reigns in."

But as it became clear that first lockdown was going to last months, rather than weeks, families began to invest in their homes, using money that might have otherwise gone on holidays and entertainment.

"It's given people that time and space to go: 'We're not going on holiday this year, but employment is secure, we can push on with some home improvements or an extension that we were thinking about or planning'," said Mr Creed.

The pandemic has also had a direct impact on what his business is now focussing on.

"We've started launching a range of garden buildings, home offices and gyms, which has all been borne from the restrictions in place," he said.

The Federation of Master Builders (FMB) Cymru says its members have seen the fastest rise in inquiries for building work for 10 years, and Wales is outperforming other UK nations.

However it warns of skills shortages, with 38% of builders saying that in the last three months of last year they struggled to hire bricklayers, and 34% said the same about carpenters.

"With the construction skills shortage becoming more acute, the next Welsh government should encourage more people into the industry by improving the image of apprenticeships and increasing the funding for vocational construction education," said FMB Cymru director Ifan Glyn.

The FMB said nearly all its members reported the price of materials has risen.

Mr Glyn added: "This recovery risks being hindered by a shortage of construction products, as 93% of builders reported material price increases in the first quarter of the year."

Tom Creed's order book is now full for all of 2021 and into 2022.

"We are looking to grow and when we're able to recruit the right people, then there is potential to bring some of that work forward and give us a bit of growth," he said.

"There's certainly a shortage of high-quality tradespeople. I think that stems from not enough investment into grassroots of the industry for many years.

"But the pandemic exposed the issue that was there with regards to the next generation of tradespeople coming through."

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But it is not all about order books - especially if you are working in the hospitality sector.

Lockdown in 2020 closed pubs, clubs, cafes, restaurants and the entire tourism sector.

It was only when restrictions began to ease in July that businesses such as the Elm Tree Hotel in resort town of Llandudno in Conwy could open its doors - briefly.

"The two months of trading that we were able to enjoy were fantastic," recalled the hotel's Lynette Esposito.

"The market was buoyant, demand was phenomenal, so the two months were very welcome at that point."

However, it has been the only trade in the 14 months - the rest of the time, the hotel's doors have been closed to paying guests.

"Clearly, when you're running a business the size of ours, you need at least £30,000 a month [to be] worthwhile," added the hotelier.

"The total amount of grants we received for the whole 12-month period wasn't even equivalent to one month's trading."

Llandudno, like many of Wales tourism centres, is dependent on the spending of visitors from outside Wales.

With the border closed for many months, that hit trade .

So now, with travel restrictions eased and Covid rules relaxing, Ms Esposito is expecting a busy summer.

"There's absolutely no doubt that staycations are definitely happening," she said.

"We've seen a phenomenal pick-up in business. Long lengths of stay. A lot of visitors coming to north Wales that have never visited the region before, so that's all positive.

"I think for business owners in hospitality in this region, while revenues are going to be great, profits are not."

That is the the big challenge for long-term security. Being busy is not enough. The question is whether cafes, pubs and restaurants will be able to make the money they need to survive, with the reduced income that comes from social distancing and the additional cost of table service.