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Lockdowns and other public health restrictions are having less severe economic effects now than they did during the first wave of the Covid-19 pandemic, Fitch Ratings says.

In a new report, the rating agency said the economic impact of the second wave of the pandemic has been more modest than during the initial shock.

“Workplace adaptation to social distancing protocols, working from home in service industries and the switch to online consumption have all helped economies adjust,” Fitch said.

“Recent disruptions to output and spending have been much more narrowly focused in parts of the service sector reliant on face-to-face contact,” it said, whereas output in the manufacturing and construction sectors has held up.

Declines in economic activity in countries such as the U.K. and France in the fourth quarter of 2020 were “mild” amid a return to nationwide lockdowns, Fitch said.

GDP readings surprised on the upside as a result, it noted.

Both Germany and Spain reported surprise output increases in Q4, on a quarter-over-quarter basis, it said.

Overall, European GDP declined by 0.6% in the quarter, compared with Fitch’s forecast of a 3.6% drop.

Similarly, in the U.S. tighter restrictions on service sector activity inflicted only one month of job destruction, Fitch reported.