The International Monetary Fund has recently warned that the second wave of coronavirus infections and lockdowns poses a “considerable risk” to the eurozone economy, which contracted by a record 16% in the first half before rebounding by 12.7% in the third quarter. The IMF argue that the output in the final three months of this year and the first part of 2021 is likely to be weaker than expected. In Redfield & Wilton Strategies’ latest European research, we explored public attitudes to the economic impact of the coronavirus pandemic.
Across the four largest economies in western Europe, a clear majority (64% to 73%) believe that the worst is yet to come with respect to the economic effects of the coronavirus pandemic. The German public are slightly more optimistic, with 21% saying that the worst is behind them. By contrast, less than a fifth in Spain (17%), Italy (15%), and France (12%) believe the worst has already passed in their country.
In all four nations, the youngest respondents (those aged 18-24) were the most likely to consider that the worst of the economic effects are already behind us. Greater economic optimism among younger respondents is also a trend we observed in Great Britain, yet it may indicate how much the younger generations have already suffered economically from coronavirus in comparison to older respondents, prompting them to think that there are few ways in which the situation could deteriorate further. Throughout Germany, France, Spain, and Italy, men are clearly more likely to think that the worst economic effects of the pandemic are already behind us than women, which may be related to the fact that some predict the economic impact of the pandemic will disproportionately affect women.
Despite widespread concern that the worst economic effects of the pandemic have not yet been realised, a majority of respondents in all four nations consider that the coronavirus crisis is primarily a public health crisis rather than an economic crisis. Concern about the impact of the coronavirus on public health is especially high in Italy, where almost three quarters (71%) say the coronavirus crisis is primarily a public health crisis, and less than a quarter (23%) consider the pandemic primarily an economic crisis. By comparison, significant minorities in Germany (35%), France (37%), and Spain (41%) say that the coronavirus crisis is now primarily an economic crisis.
The relatively high proportion of Spanish respondents who believe that the pandemic is primarily an economic crisis is likely linked to the fact that a third (33%) are already being paid less than before the pandemic. Likewise, more than a quarter (26%) of respondents in France and Italy are also being paid less than before the pandemic, while roughly a fifth (22%) of the German public are earning less than they were at the start of the year. In France, Germany, and Italy, women are more likely than men to say they are now earning less than they were before the pandemic began.
As well as a significant proportion of the population saying they now earn less than they did before the pandemic, the public across Europe have a pessimistic perspective about their personal financial prospects during the upcoming winter months. In Italy, a plurality (37%) expect their economic situation will worsen in the next three months, while a similar proportion (36%) hold this view in Spain. 30% of French respondents expect their financial situation to worsen, while a fifth (20%) of Germans are expecting a negative impact to their financial position. Overall, less than half of the public in France, Italy and Spain believe their financial situation will stay the same between now and the end of February, underscoring the scale of economic volatility being experienced across Europe.
Throughout the duration of the pandemic, our research has provided insight that working from home has become increasingly common in Europe. At this stage, a slight divergence has emerged in the levels of home working: whereas in Spain (57%) and Italy (59%) a clear majority of those who are currently working have been working from home during the pandemic, less than half of active workers in Germany (48%) and France (47%) have been working from home.
Of those who have been working from home in Italy, the majority (52%) now consider that they have been more productive than they were when working in an office or other location, a rise of 10% since our polling in September. By contrast, those working from home in France are 14% less likely to consider that they have been more productive compared to September. At this stage, only 39% of French workers-from-home say they have been more productive, compared to 53% in September.
Meanwhile, 44% of Spaniards who have been working from home feel more productive (no shift since September). Less than half (47%) of Germans say they have been more productive working from home. Overall, however, in all four nations less than a quarter (15-24%) of those who have been working from home say they have been less productive than in an office or other location, providing further evidence that work from home practices may be here to stay.
Ultimately, our latest research in Europe highlights that the vast majority are concerned that the worst economic effects of the pandemic are still to come. Indeed, while many have already suffered financially, a massive proportion of respondents across all four nations believe their personal financial situation will worsen during the winter months. Meanwhile, among those who are continuing to work from home, self-reported productivity remains high, yet it is unclear what the long-term impact of homeworking will be on other dimensions of the economy.
