Coronavirus has forced individuals, families and businesses into emotional and financial turmoil. According to a survey conducted in March, young people are most concerned about the long-term impact of coronavirus on their finances, the unemployment rate and their wages. Express.co.uk speaks to a financial expert about the long-lasting impact of coronavirus on the employment market.
The UK’s economic output is projected to drop by 15 percent in the second quarter of 2020 and unemployment may double.
Britain is facing the possibility of the deepest recession since the financial crisis.
A recession is defined as two consecutive quarters of falling GDP, meaning economic activity is falling for a prolonged duration.
Each business and industry is feeling this recession differently.
Some employees are able to work from home, however, others such as builders, bar staff and hairdressers cannot work from their homes in the current climate.
READ MORE: SME manufacturers call for ‘urgent’ support as job loss fears grow
Ms Johansson said currently the hardest hit sector is hospitality because more than 70,000 pubs, bars and restaurants have been forced to close.
In March, Prime Minister Boris Johnson implemented a nationwide lockdown ordering all non-essential businesses to shut.
The financial expert added: “Businesses that run on a smaller scale are particularly vulnerable.
“They face uncertain times as they navigate how they effectively prepare for the unknown.
“Unforeseen closures have also meant they need to ensure plans are in place to overcome any cashflow issues they have encountered in the face of the pandemic as well as any debts associated with the running costs integral to keep their businesses afloat.”
ESA benefit: What is ESA benefit? [INSIGHT]
Shock data shows UK jobs at risk in COVID 19 crisis [EXPLAINER]
Martin Lewis provides update for self-employed amid coronavirus crisis [ANALYSIS]
The economy should begin to bounce back once the lockdown restrictions are lifted.
However, it is likely the economy will recover to its previous position slowly.
Ms Johansson said: “From what we’re seeing, the spirit of community is hugely important at this current time and I expect the business owners who are innovating temporarily will be the ones to find it easier to bounce back.
“This includes the cafés and restaurants that have transformed themselves into food-delivery services or the cooking schools providing online cooking courses via Zoom.”
According to experts, even if GDP were to return to its 2019 position by the end of 2021, this would not necessarily mean the economy was back to its previously buoyant state.
She said: “We simply don’t know how it’s going to affect the hospitality sector once things begin to return to normality. In the short term, we’re expecting a big spike in activity once the lockdown is over, but are also anticipating a drop later in the year given that so many people have been financially affected by the crisis.
“Eating out and taking holidays will likely be luxuries people cut back on.
“A lack of inbound tourism will also make this harder and we have started to see certain establishments struggle as early as January when the outbreak started to take hold in China.
“The flip side to this is that this might lead to many more people deciding to holiday in the UK, which will be good news for our restaurants, pubs and hotels.
“We’re staying optimistic for the time being and I think some sectors of the hospitality industry will find it easier to bounce back than others.
“The businesses that survive are also likely to benefit from a reduction in labour churn, with staff valuing the good relationship with the employers that stood by them.”
She added: “Coronavirus has given the people in the hospitality sector an opportunity to stop and reflect about the way they operate their business in the future.
“Some may decide they can do ‘more with less’, which is a threat to jobs. At the same time, this crisis will no doubt create a whole line of new jobs that businesses didn’t appreciate beforehand.
“The tech-led approaches that helped small businesses survive by reaching new and existing customers will be hugely valued, which means new jobs for sectors that didn’t traditionally consider themselves digital.”