A similar phenomenon is developing with the Covid recession as happened with Brexit. News outlets – the BBC in particular – are choosing to focus on dire economic predictions at the expense of more positive real-world data.
Source- The Spectator - 28/07/20
Yesterday we heard no end of it when EY forecast that the economy would not reach its pre-Covid size until the end of 2024, 18 months longer than it had previously forecast. Yet where is the coverage today of the CBI’s distributive trades survey, which suggests that retail sales in July have been pretty much back to where they were a year ago, and that car sales are actually up on last July?
The tracker is a survey that asks retailers, quite simply: are you doing more business this year than you were doing last year? For July, 4 per cent more retailers said sales had increased since last year than said sales had fallen. For motor traders, the difference was starker: 18 per cent more of them reported an increase in business compared with last July.
Not everyone is doing well: 22 per cent more wholesalers reported a fall in sales than reported a rise. There are signs of wildly divergent fortunes between online and traditional shops – among online retailers, 48 per cent more of them reported a rise in sales than reported a fall. Nor does the survey suggest much optimism for the immediate future – 5 per cent more retailers are expecting sales to fall back in August than are expecting them to rise. Many customers, they suspect, are catching up with the shopping they were unable to do during lockdown and that their appetite for spending will not be maintained.
Nevertheless, the CBI figures for July build on the better than expected ONS figures for retail in June, published last week. Retail sales, overall, are enjoying a V-shaped recovery even if the pattern of recovery is very mixed. There is likely to be mass upheaval, with large numbers of job losses in traditional stores, while online retailers boom. As for the sharp rise in activity among motor traders, you wonder how much is down to frustrated demand from people unable to shop around for a new vehicle during the lockdown – and how much of it represents a shift away from public transport and towards the private car.
Overall, the picture is of an economy that is poised to recover – but where businesses will have to be fleet of foot to take advantage of shifts in demand. The real data suggests a very different – and more interesting – narrative from that spun by relentlessly negative guesswork which tends to catch the eyes of some news editors.
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