EUROPE UNDER THE SEIGE OF PANDEMIC UNITED KINGDOM
Written by: Andrew Sia
Introduction
The European Union is the home to 440 million people, and it is the United States number one trading partner. Earlier on, that was before the pandemic, the 27-nation bloc was predicted to have grown its economy by 1.2% this year. It is now predicted to shrink by 7.4%. So that we know during the global financial crisis in 2019, it shrank by 4.5%. This is the deepest economic recession in the history of the European Union.
Its economy has been threatened by a prolonged recession, a possible wave of the virus, or a weak economy recovery, and this would all add more burden to its people, and hurt the companies as there is already a political divisions between the wealthier northern countries and the poorer southern countries.
It is expected that the economies of Italy and Spain would hit hardest by the pandemic and will most likely shrink by over 9% each. Greece, suffered after a decade of economy calamity, will suffer the most and likely to shrink by 9.7%. Poland, will perhaps suffer the least, only shrink by 4.5%.
Unemployment is likely to rise to 9%, from 6.7% the year before.
This time even the bloc’s biggest economy, Germany, will also be suffering from its worst recession since World War II. It is set to shrink by 6.5% but it will expect to recover very quickly.
France, the second-largest economy is expected to contract 8.5% this year.
This severe downturn in Europe will have a major repercussions for the United States economy because the two economies are intertwined. Between the two, exchanging of the goods and services was $1.3 trillion last year. The European companies are hiring four million people in their plants in the US, companies like BMW, Daimler, and Siemens.
In this study, we will focus on the United Kingdom, Spain, Germany, France, and Italy. We will be talking about the general economy, manufacturing, the risks and the opportunities that are relevant to the situation. All the charts are from Statista, a service that covers many areas of interest.
United Kingdom
Generation situation – The country is one of the gravely affected countries for the Covid-19. At this writing, August 28, the country has 331,644 affected cases with 41,486 deaths. The fatality rate of 12.5% is relatively high in comparison with the other countries. Currently, its total cases for this pandemic is number 13 among all the nations.
The country entered into a lockdown and resulted a decline of it service industry for 81% and the manufacturing industry for 75%.
According to its Purchasing Manager’s Index (PMI), a decline of a quarterly contraction ranging from 7% to 13% in its economy, which is the largest since the end of the Second World War. Its unemployment is expected to rise from 2019’s 3.8% to 10% which can be translated to 2 million jobs.
In a snapshot, please refer to the following.
Population – According to the Economist’s Pocket World 2020 Edition, it has a population of 66.2 million. From 2010 to 2020, it is expected the population growth by 6.4%. The population from age 0 to 19 is 23.3%, from 65 and over is 19%. According to the following chart, its population can reach 72.5 million. It is number 21 country in population in the world.
To my surprise that its population is growth by 0.6% amidst the Brexit.
The following chart can show you the population’s age distribution between the men and women.
Globally, the UK has a very high human development index. It is 92.2 according to the Economist.
Economy – In according to the Economist, the country’s GDP was $2.638 trillion in 2019 and the average annual growth in real GDP from 2012 to 2017 was 2.2% annually. The UK has the 21st highest real GDP per capita in the world.
In comparison with the other Western European countries, the UK real GDP per capita’s growth is lower than average.
The UK has a fiscal deficit of 1.6% of its GDP in 2018. Its household consumption expenditure was higher than regional average. Consumers spend the most in the area of housing, water and electricity. Like most developed countries, services accounted the highest in the GDP. According to the Economist, services accounted for 81%, industry, including manufacturing for 18%, and agricultural 1%.
The country’s inflation rate is projected to decrease.
As we already mentioned that the UK had a fiscal deficit of 1.6% of GDP in 2018. We show you now the revenues versus the expenditures as the following.
In comparison with the household consumption expenditure, the UK was found higher than regional average.
Its debt-to-GDP ratio is expected to increase over the time period. This is not necessary a bad situation as the country tends to spend its revenue on its people for better welfare, and healthcare is one of those areas.
The country’s income per capita, is surprisingly lower than the countries in the region in Central and Western Europe.
Business opportunities in the UK – It is to my surprise, perhaps I didn’t pay the necessary attention in the first place, that it is the easiest among all the countries. For instance, it only takes 4.5 days to start a business. You will be surprised that for the Central and Western Europe, it would take much longer.
In terms of its competitiveness, it belongs to the top-tier. I ask you to read the fine prints of the following chart.
You will also find the following chart interesting. Not only there are new businesses being registered, but also the friendliness that makes the UK scored higher than a lot of other countries.
Trade and transport-related infrastructure, the UK is higher than the regional countries.
Labor situation in the UK – The total labor force is trending up. And it is still dominated by male labors.
It is no surprise to find that most of the employees are taken up by the service industry. And the labors’ education level is very acceptable.
Its unemployment rate is also manageable.
Export – Perhaps it is a service oriented economy, its export business is lapsed behind. In the following chart, you will also find the report about the Central and Western Europe, and Germany is always compared as the leading economy.
The following chart has to do with the merchandise trade value in export and import.
The following is the breakdown of the product categories for the UK exports and imports. You can see the changes over the years.
You can refer to the following chart for the different categories in exports and imports with Central and Western Europe, and again Germany is used for the benchmarking.
Nevertheless, its service-related exports are still higher than its service imports.
Investment – This is referring to the Foreign Direct Investment (FDI) and the following chart is showing you the inward investment the countries are taking. This is a chart showing the global tendency. You can see that the investments flow into China is for the reason of its vast market and the opportunities it had shown to the investors. The second largest country in this chart is the US market that attracts investors. The US is also a more mature and established market.
The second chart is the outward FDI and it was captured in 2018 as the first one. This was the reflection during that year. I doubt if China can remain so bullish after so many things have taken place in the recent two years.
The following chart addressed to the UK. Not to forget that the UK is also one of the key financial center, after the US, Hong Kong, and Japan, it is the number four financial center.
Operation risk – The operation risk in the UK is relatively low. It is number nine in the selected 149 countries and it comes third to the other 13 countries in the region of Central and Western European countries.
In the four areas, labor market, logistics, trade and investment, and crime and security, the UK scored high in the four areas. You can refer to the following.
Retail market – The UK is a well-developed market. It has the global chains operate in large cities, and even medium-sized cities and rural areas. The store ownerships are a mix of independent stores and national or international chains. Payment methods using electronic and mobile payments are commonly used aside of the traditional payment method.
Consumers’ spending can be referred to the following.
The product and service categories of the spending can refer to the following.
Brand awareness – For the mobile phone it is the most critical. Anyway, the rest of the categories are interesting.
E-commerce in the UK – The revenue in the e-commerce market amounted to $84 billion.
The e-commerce penetration compared to the region, it is above the average.
The leading eCommerce market shares are as the following.
The eCommerce revenues are keep on growing.
Digital infrastructure – The UK has the 12th highest internet penetration in the world in 2019. The other countries that are ahead are UAE, South Korea, Norway, Iceland, Qatar, Bolivia, Kuwait, and Malaysia.
Environment – The country has the 17th highest carbon dioxide emissions in 2018. We have to know that China, the US, India, Russia, Japan, and Germany are the top six countries.
Its emissions per capita is comparatively low. It has also a low exposure to particulates
Its energy shares and the renewables compared to the other European countries are as below.
Closing Remark
We would want to give the credit to Statista, which is a Statistics Portal for industrial-specific data and it has 1,000,000 reports and studies. You can go online www.statista.com for more details.
This article using the title of Europe Under the Siege of Pandemic – United Kingdom is more like a country report.
In the light of the social uncertainties around the world and also the changes that can have brought by the pandemic, this series of reports can also be used as a very thorough study for migrating to the United Kingdom and also the other places in the world. But the United Kingdom can be more familiar because of the old colonial ties with Hong Kong. And besides the country’s English is the same as the one that is used in Hong Kong and so it won’t be unfamiliar and difficult for the Hongkongers.
Its society has 28.8 million households and the average number of household is 2.3 only.
Mobile phone subscribers per 100 is 50.1 and internet access is 94.6%. Its broadband subscription per 100 population is 39.3 and the broadband speed is 16.5 megabits per second.
For its cost of living, take New York for 100, London is only 86.