Some very interesting statistics were released this week relating to trade over the past twelve months. What was so interesting about these two particular sets of statistics is that both of them were unique to looking backwards from spring 2021, and this period will be studied in schools and universities for many years to come.
At the middle of March we are now able to look back at two remarkable events – Brexit, and the pandemic. Either of these events by themselves would have been enough to send seismic shockwaves through businesses and how they trade, but together the effects have been potentially so much worse.
Brexit is perhaps the easier story of the two to tell. After four and a half years of uncertainty for British businesses, Brexit eventually became a reality at the end of December 2020. As nothing was certain until literally the last minutes, businesses have not had adequate time to prepare themselves and neither have the respective governments and the border controls. These circumstances have led to massive administrative and bureaucratic confusion, which in turn has led to huge disruption to trade. So big in fact, that Britain’s exports to the EU fell by a record 40% at the start of 2021. This will of course improve over time as border posts and businesses alike learn the new procedures for importing and exporting under the new regime, but it does not alter the pain felt at the beginning of 2021.
A far more cheering set of statics also just released relates to the damage caused by the pandemic and, more specifically, the lockdowns, on the UK economy. I have written a lot about the need for businesses to adapt and pivot in order to survive and adapt to the new circumstances, but these statistics show just how well businesses have managed to do that.
During the first lockdown period in April 2020 the UK economy collapsed by 18.3%. Every business had to react to a totally new set of circumstances and many of them had no real idea of how to do so. It took time to learn what needed to be done and how to make it happen. However, scroll forward to the third lockdown in January 2021 and the economy only shrank by 2.9% which should be seen as a truly remarkable achievement compared to only nine months previously. Not only was this smaller than expected, but it represented a reduction of less than one sixth of that of the first lockdown. The Office for National Statistics has officially put this large improvement down to how well business have managed to adapt and learn lessons from the first lockdown.
Whilst the vaccines that have been developed should prevent further lockdowns from being necessary, and we would all hope that we have now put the worst behind us, it is clear that we are going to have to live with COVID-19 for the foreseeable future. It is also obvious that we will not of course have to go through the pain of Brexit again.
But whether it is COVID, some other pandemic, or something else altogether, it is very clear that what business have learnt over the last year has proven to be extremely valuable lessons in how to survive in tough times as well as easier times.
So whilst the next steps might not always be in the expected direction of travel, and they might end up being meandering in nature in order to get around obstacles thrown in our paths, with determination, perseverance, and perhaps just a little sprinkling of luck, we should be able to ensure that each of us, and our businesses, arrive safely at journey’s end.