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What Will the New Normal Look Like for Businesses in Wales?

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A lot more people will be working from home and there will be less demand for office space when the lockdown is eased and the economy emerges into a ‘new normal’, according to CBI Wales Chair Wayne Harvey.

Speaking in the latest Wales Business Review from Business News Wales, hosted by former First Minister Carwyn Jones, Wayne said he thought the new normal would be a hybrid between conditions before the crisis and some of the more radical visions people have espoused during the lockdown.

The senior partner at Deloitte said a recent survey showed that more than 60% of people did not want to go back to the old way of working, and a lot of people prefer to work from home.

He added:

“In Cardiff we’ve got approaching 1,400 people, all of them now work from home. I’m sure they don’t all want to continue working from home, but there’s a lot of support for us having flexed arrangements, where you might work part of the week in the office and part out.

“Let’s not forget that as we come out of the lockdown that may be necessary anyway, because of social distancing. Even if you do need to go back into the office, there may not be the space available to enable you to social distance.”

Wayne said that boards and businesses are already asking what their real estate needs will be, not just for the next six months but for next six years.

“I wouldn’t like to say what’s going to happen to the real estate market, but it will certainly change. You might argue that the demand for office space will reduce,” he said.

“Linked to this is the way we’re buying things, because home delivery has expanded rapidly, so we’re seeing an increase in demand for warehouse and storage space.”

Wayne also pointed out that while there would be some people who would probably not want to travel as much, preferring to take their holiday in the UK,

“there will be others who will react as if it was January still and will want to go back to the old norm.”

“So I think it will be a mixture of things, but life will never be the same again for sure.”

Joining Wayne and Carwyn on the Business Review was Cardiff Capital Region director Kellie Beirne, who said they would probably need to rerun the forecasts about transport demand and capacity.

She said:

“The old adage is never waste a crisis. I’ve been talking to people about this over the last few weeks, and there’s one school of thought that says: behavioural change takes six months to kick in; everything will just go back to normal, it just takes a bit of time. Then there’s another, much more radical school of thought that says: no, we must use this opportunity to ask different questions and expect different outcomes.”

Kellie said there may be an opportunity for a more differentiated strategy on transport.

“If you look at the Cardiff Capital Region, at the moment it’s 80% car ownership, 10% public transport, 10% active travel. You’ve got to ask, is that the best we can hope for?” she said.

She added that people were asking whether so much money should be spent on roads when the need in the future would be for more digital connectivity. The question would be less about how you get people to their workplace, and more about how you connect up their homes to the wider world.

“I know conventional thinkers will say, work is a place you go to, but I think we’ll see work as a thing you do, and I think that’s a shift that we all need to welcome and embrace,” she said.

She added that businesses will see more use of shared spaces, smaller footprints, and more collaboration.

“Even on my local high street now some of the retailers are collaborating. There are integrated spaces which will help them to share costs and have a more diverse product offering in the future,” she said.

She added:

“Naturally we adapt and adjust and there will be new ways, new innovations; and I’m really interested in some of the new developments and ideas that will come out of this, and trying to think hard about how we get behind and catalyse some of that.”

 

Wales Business Review E9 from Business News Wales on Vimeo.