UK creative industries projected to lose £74bn in revenue in 2020

The Creative Industries Federation has warned of a “cultural catastrophe” following the COVID-19 pandemic, with widespread job losses and revenue loss.

The UK’s creative industries are projected to experience a revenue drop of £74bn in 2020, according to the Creative Industries Federation (CIF).

The figures emerge from research carried out by Oxford Economics, which reveal the UK’s creative industries are “on the brink of devestation”, CIF says. They also revealed that 406,000 creative jobs – 1 in 5 – are expected to be lost across the UK.

According to CIF, the UK’s creative industries was previously growing at five times the rate of the wider economy, employing over 2m people and contributing £11.7bn to the economy. However, it has suffered during the COVID-19 outbreak, as budgets are cut, projects paused, and staff furloughed.

Design Council CEO Sarah Weir says that the report “makes clear the potentially devastating impact of Coronavirus on the creative industries”.

“This loss is replicated for the design economy, potentially risking £37bn in Gross Value Added (GVA)”, she adds. GVA is the measure of the value of goods or services produced in a specific sector of the economy, a marker of an industry’s productivity.

Sector break down

The report estimates that the creative industry will be hit twice as hard as the wider economy, with a total GVA short fall of £29bn. Because of this, many creatives are likely to lose their jobs: 119,000 permanent creative workers could be made redundant by the end of the year. Freelancers are particularly vulnerable with 287,000 roles likely to be terminated by the end of 2020.

The report breaks down the losses by sub-sectors, revealing areas that are particularly at risk. Design and designer fashion is projected to lose £2bn in revenue and 30% of its jobs (51,000). However, when the reach of design across the whole sector is considered, the risk is amplified. A potential GVA drop of £37bn is forecast, and over 300,000 jobs losses.

Other sub-sectors that are affected include postproduction and VFX (up to £827m in revenue loss) and the craft economy (£513m). Advertising and market research could experience a huge loss, with a drop in turnover of up to £19bn.

Other fields that could have a knock-on effect for design are also badly hit. Theatre is projected to lose £3bn in revenue, film, TV, radio and photography £36bn and music, performing and visual arts £11bn.

Museum and galleries are expected to undergo a 9% drop in revenue (£743m) and a loss of around 4,000 jobs but the impact has been lessened by being able to reopen in July with social distancing measures.

Regional breakdown

Regionally, London is expected to undergo the a drop in GVA of 25% (£14.6bn). The capital could also lose over 100,000 creative jobs. Scotland is projected to lose a relatively small 6% of jobs but see the largest percentage drop (39%) in creative industries GVA (£1.9bn).

Wales is projected to lose 26% of its creative jobs (a total of 6,000) and see a 23% drop (£100m) in GVA for its creative industries. Northern Ireland, meanwhile, is expected to lose 20% (6,000) of its creative jobs and experience a £300m drop in GVA for the creative industry.

According to the report, in the East Midlands and North East there will be relatively small losses in creative jobs (1% and 3% respectively) thanks to widespread use of furloughing but this is likely to increase once the job retention scheme has been withdrawn.

“Urgent action” required by the government

Government intervention for the creative industry is a necessity, Weir says. “The job losses and financial cost identified here are severe enough to warrant urgent action from government,” she adds.

Weir also points out that designers and design businesses are likely to be at the “forefront” of the “national and global solutions from this pandemic”. Design Week has covered the ways in which designers are thinking about life post-COVID, from re-thought office spaces to socially-distanced retail design.

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