A new study from the Creative Industries Federation, which has been supported by the Advertising Association predicts a ‘cultural catastrophe’ awaiting the UK with forecasts of revenue decline and significant job losses across the sector.
- New research from Oxford Economics projects a combined revenue drop of £74 billion for the UK’s creative industries in 2020 (£1.4 billion a week).
- 406,000 (1 in 5) creative jobs expected to be lost – more than nine times the entire workforce of British Airways or almost triple the workforce of Asda in the UK.
- Impact to be felt in all parts of the UK, with creative industries projected to be hit twice as hard as the wider economy overall and up to three times as hard regionally.
The UK’s creative sector was previously growing at five times the rate of the wider economy, employing over 2 million people and contributing £111.7 billion to the economy – more than the automotive, aerospace, life sciences and oil and gas industries combined.
The new report, The Projected Economic Impact of Covid-19 on the UK Creative Industries, projects that the creative sector will be hit twice as hard as the wider economy in 2020, with a projected GVA shortfall of £29 billion. Many creative sub sectors are expected to lose more than half their revenue and over half of their workforce. Despite the Job Retention Scheme, the report projects that 119,000 permanent creative workers will be made redundant by the end of the year. The impact on employment is set to be felt twice as hard by creative freelancers with 287,000 freelance roles expected to be terminated by the end of 2020.
Within our own industry, advertising and market research could see turnover drop by £19 billion (-44%) projecting job losses of 26% (49,000), with spend on advertising expected to drop by £4 billion in 2020 (-17%).
Our Chief Executive Stephen Woodford said: “We are working closely with Government to protect and rebuild the UK’s advertising industry, both within the UK as a vital engine of our economy, but also as a global hub with international trading partners. Top of the list is how a tax credit for advertising could help get the UK economy rapidly firing on all cylinders again. We also need to see the most ambitious international marketing campaign possible from Government for our creative industries, particularly with Brexit looming. We are ready to make all of this happen fast and with real impact.”
Regionally, London is projected to experience the highest drop in creative industries GVA, seeing a £14.6 billion (25%) shortfall. However, Scotland and the North East are expected to be hit hardest relatively, with projected GVA decreases of 39% (£1.7 billion) and 37% (£400 million) respectively. 1 in 6 (112,000) creative jobs could be lost in the capital, with the West Midlands expected to be most impacted in relative terms, with 2 in 5 creative jobs in the region projected to be lost. The North West and South West will also be hit hard, with both projected to lose around a third of creative jobs. This could represent a major setback to the levelling up agenda, particularly in light of research from Cambridge Econometrics, released by the PEC/Creative England this week, which suggests that, based on recovery from the 2008 recession, creative industries outside of London may take much longer to ‘bounce back’ than those in the capital.
- Creative industries GVA projected to fall by £29 billion (-25%), with the creative industries being hit twice as hard as the wider UK economy*
*OBR estimate for UK GDP growth this year is -12.8%.
- Creative industries projected to lose 406,000 jobs and £74 billion in revenue (-30%).
- Music, performing and visual arts projected to lose £11 billion in revenue (-54%) and 57% of jobs (178,000) with theatres, recording studios and concert venues remaining closed.
- The music industry is projected to lose at least £3 billion in GVA (50%) and 60% of jobs (114,000), with the sector being hit hard by the collapse in live music and touring.
- Theatre projected to lose £3 billion in revenue (61%) and 26% of permanent jobs (12,000), although this estimate only takes into account current cancellations and does not account for the reluctance of audiences to return to venues (only 20% would return on opening night according to a survey by Indigo). Further research from UK Theatre/SOLT shows that, without further intervention, job losses in theatre across permanent and freelance roles is likely to number over 200,000 (over 70%).
- Film, TV, video, radio and photography could lose £36 billion in revenue (-57%), with the sector projected to lose 42% of jobs (102,000) as social distancing constraints affect cinema capacity and the cost of filmmaking.
- Postproduction and VFX could lose £827 million in revenue (-58%).
- Radio projected to lose £186 million in revenue (-21%) as it sees a decline in advertising.
- Crafts could lose £513 million in revenue (53%), with the craft economy projecting to lose 47% of jobs (58,000) as many craft practitioners experience the fallout of closed workshops and retail spaces.
- Design and designer fashion within creative industries could lose £2 billion in revenue (-58%) and 30% of jobs (51,000). When we look at the reach of design across the economy, the risk is far greater, with a potential GVA drop of £37 billion (-47%) and over 300,000 jobs projecting to be lost.
- Advertising and market research could see their turnover drop by £19 billion (-44%) projecting job losses of 26% (49,000), with spend on advertising expected to drop by £4 billion in 2020 (-17%).
- Publishing could lose £7 billion in revenue (-40%) and 26% of jobs (51,000), affected by the closure of bookshops and decline of print sales.
- Museums and galleries could lose £743 million in revenue (-9%) and 5% of jobs (4,000), with the impact being mitigated by being able to reopen in July under social distancing constraints.
- Architecture projected to lose £1 billion in revenue (-24%) and 2% of jobs (1,800 jobs).
- London is projected to lose 16% of its creative jobs (109,800) and see a 25% (£14.6 billion) drop in creative industries GVA whilst the South East is projected to lose 24% of its creative jobs (82,000) and see a 25% (£4.7 billion) drop in creative industries GVA. Of the 406,000 creative jobs expected to be lost, 47% are projected to be in London and the South East.
- The East of England is projected to lose 25% of its creative jobs (42,000) and see a 31% drop (£1.9 billion) in creative industries GVA.
- Scotland is projected to lose 6% of its creative jobs (7,000) but see the largest percentage drop in creative industries GVA (39% / £1.7 billion).
- The North West is projected to lose 30% of its creative jobs (48,000) and see a 30% (£1.4 billion) drop in creative industries GVA .
- The West Midlands is projected to be hit hardest in terms of job losses, with 43% of creative jobs projected to be lost (51,000) and a creative industries GVA shortfall of 32% (£1.4 billion).
- The South West is projected to lose 28% of its creative jobs (43,000) and see a 29% (£1.3 billion) drop in creative industries GVA.
- The East Midlands is projected to lose 1% of its creative jobs (1,300) but see a 31% (£800 million) drop in creative industries GVA, owing to a greater use of the furloughing scheme. However, the region is projected to be amongst the hardest hit once the Job Retention Scheme is withdrawn.
- The North East is projected to lose 3% of its creative jobs (2,000) but see a 37% (£400 million) drop in creative industries GVA, owing again to a greater use of the furloughing scheme. However, like the East Midlands, the region is projected to be hit harder once the Job Retention Scheme is withdrawn.
- Northern Ireland is projected to lose 20% (6,000) of its creative jobs and see a 23% (£300 million) drop in creative industries GVA.
- Wales is projected to lose 26% (15,000) of its creative jobs and see a 10% (£100 million) drop in creative industries GVA .
- Yorkshire is projected to see a 3% (£100 million) drop in creative industries