Business insights and impact on the UK economy: 13 January 2022

• In late December 2021, approximately 3% of the workforce were estimated to be on sick leave or not working because of coronavirus (COVID-19) symptoms, self-isolation or quarantine, this is the highest the figure has been since comparable estimates began in June 2020; the other service activities industry, which includes hairdressing and other beauty treatments, reported the highest absence levels (7%).

• Just over one-fifth (21%) of businesses reported increased cancellations from customers in the last month, with 64% of businesses in the other service activities industry and nearly half (44%) of businesses in the accommodation and food service activities industry reporting an increase.

• More than half (55%) of businesses reported that implementing safety measures resulted in an increase in their operating costs, with 8% reporting costs increased substantially and 47% reporting costs had increased a little.

• Businesses within the accommodation and food service activities industry reported the highest percentage of businesses having less than three months of cash reserves (including no cash reserves), at 54% in early January 2022, up from 44% in early December 2021.

• Of not permanently stopped trading businesses, 16% reported experiencing global supply chain disruption in the last month, with the percentage highest in the manufacturing industry (35%).

• Around four-fifths (79%) of currently trading importing businesses reported they had experienced a challenge importing in the last month, while for exporting this figure was 66%; both figures have increased, from 75% and 65% respectively, from the month before.

The data presented in this bulletin are the final results from Wave 47 of the Business Insights and Conditions Survey (BICS), which was live for the period 29 December 2021 to 9 January 2022.

The final response rate for Wave 47 was 19.7% (7,669 responses). The average response rate in previous waves was approximately 23%. The Wave 47 response rate was lower than usual because of the Christmas period and the survey being live for a shorter period of time. This means that the estimates in this release are subject to more uncertainty than usual.

For questions regarding the last month, businesses were asked for their experience for the reference period 13 December 2021 to 9 January 2022, for questions regarding the last two weeks, businesses were asked for their experience for the reference period 13 December to 26 December 2021, although some businesses may have responded in relation to the point of completion of the questionnaire (29 December 2021 to 9 January 2022). This is consistent with previous waves of the survey.

These dates should be kept in mind in relation to coronavirus (COVID-19) guidance as the estimates could be affected by both the location of the business and the date on which the business responded.

For experimental single-site weighted regional estimates up to Wave 34 (28 June to 11 July 2021), please see Understanding the business impacts of local and national restrictions, UK: July 2021.

Figure 1: Headline figures from the Business Insights and Conditions Survey

Notes:

1. Trading status, financial performance, business resilience: for presentational purposes, response options have been combined and the option "not sure" has been removed.
2. Financial performance: businesses were asked for their experience for the reference period, however, businesses may respond from the point of completion of the questionnaire.
3. Data are plotted in the middle of the period of each wave.

Download the data

.xlsx

Trading status

In early January 2022, just over 9 in 10 businesses (91%) were trading, with 77% fully trading and 14% partially trading. This compares with 81% fully trading and 11% partially trading in late December 2021.

The education (private sector and higher education businesses only) industry and the accommodation and food service activities industry both reported the lowest percentage of businesses trading, both fully and partially, at 84% in early January 2022.

In the accommodation and food service activities industry, the percentage of businesses currently trading decreased by 12 percentage points from late December 2021, driven by the food and beverage service activities sub-industry.

Turnover

In the last month, nearly a third (32%) of all currently trading businesses reported to have experienced a decrease in turnover compared with normal expectations for this time of year. This compares with 30% reported the last time the question was asked, however, some of the industry-level effects are more pronounced, with the accommodation and food service activities industry reporting a 26-percentage point increase in reduced turnover during this period.

Of businesses that reported a change in turnover in the last month, 53% reported the coronavirus (COVID-19) pandemic as the main reason for change, while 12% reported a combination of the coronavirus pandemic and the end of the EU transition period as the main reason.

Cash reserves and survival confidence

In early January 2022, the construction industry reported the highest proportion of businesses with no cash reserves, at 15%.

Two-fifths (40%) of all businesses reported having less than three months or no cash reserves, with the accommodation and food service activities industry reporting the highest percentage, at 54%. This industry also reported the highest percentage of low or no confidence to survive the next three months, at 17%.

Of all businesses not permanently stopped trading, 7% reported they had low or no confidence they would survive the next three months, however, when excluding businesses with fewer than 10 employees this percentage reduced to 4%. In contrast, 84% reported having high or moderate confidence they would survive the next three months. This increased to 92% for businesses with 10 or more employees.

Workforce status

In late December 2021, approximately 3% of the workforce were estimated to be on sick leave or not working because of coronavirus symptoms, self-isolation or quarantine. This is the highest the figure has been since comparable estimates began in June 2020.

The other service activities industry, which includes hairdressing and other beauty treatments, reported the highest absence levels (7%) in late December 2021. The accommodation and food service activities industry also reported high absence levels (6%), driven by the accommodation sub-industry. These industries also saw the largest movement in percentages from early December 2021 to late December 2021, increasing by 5 and 4 percentage points respectively.

Approximately 57% of the workforce were estimated to be working from a designated workspace (that is, not from home) in late December 2021. This estimate is down from 60% reported in early December 2021 and is also the lowest proportion reported since the response option was introduced in early October 2021.

Of currently trading businesses, 9% had exported and 11% imported in the last 12 months and reported how their exporting or importing differed compared with normal expectations for this time of year. These businesses were asked about the challenges they had experienced with exporting or importing in the last month.

Figure 6: Exporting and importing figures from the Business Insights and Conditions Survey

Notes:

1. Exporting or importing compared with normal expectations: percentage of businesses currently trading and had reported they had exported/imported in the last year. For presentational purposes, response options have been combined.
2. Exporting or importing challenges: percentage of businesses currently trading, reported they had exported/imported in the last year, and reported how their exports/imports were affected. Businesses may report that exporting/importing has not been affected but are still able to report challenges.
3. Caution should be taken when interpreting these results based on the specific routing of this question meaning that only a small number of businesses responded.
4. Businesses were asked for their experience for the reference period however, businesses may respond from the point of completion of the questionnaire.
5. Data are plotted in the middle of the period of each wave.

Download the data

.xlsx

Of currently trading businesses, 66% experienced a challenge with exporting and 79% with importing, in the last month. Changes in transportation costs and additional paperwork remain the top challenges for both exporting and importing. The manufacturing industry reported the highest percentage of businesses experiencing a challenge with additional paperwork (77%) and changes in transportation costs (70%) while exporting.

Of all currently trading businesses that have imported, the accommodation and food service activities industry reported the highest percentage of businesses experiencing a challenge with changes in transportation costs, at 77%.

Of the challenges documented, and for all currently trading businesses, the changes in transportation costs, finding information on how to import, and time taken for checks at the border reported the highest increases between late November and late December 2021, of 4 percentage points.

Further industry, size band and breakdowns of trade questions by type of export or import (goods, services or both) are available in the accompanying dataset. This includes an unweighted data time series produced by linking samples from the Annual Business Survey (2018) and the Annual Survey of International Trade in Services (2019) to the Business Insights and Conditions Survey (BICS) microdata. A detailed description of the methodology can be found.

Of not permanently stopped trading businesses, 16% reported experiencing global supply chain disruption in the last month, while a third (33%) of all businesses reported no disruption. For businesses with 10 or more employees, these figures increased to 26% and 34% respectively.

Businesses not permanently stopped trading were asked if they had experienced changes to financial or operational activities in the last two weeks.

Nearly 1 in 10 (9%) reported that there were unexpected changes to financial or operational activities in late December 2021. The highest percentage was seen in the accommodation and food service activities industry, at 26%, followed by the transportation and storage industry, at 25%. For businesses with 10 or more employees, 12% reported experiencing unexpected changes to financial or operational activities.

Businesses not permanently stopped trading were also asked if they were expecting any financial or operational activities to be affected by the coronavirus (COVID-19) pandemic in the next two weeks. Approximately one-quarter (25%) do expect activities to be affected whereas the remaining three-quarters do not expect financial or operational activities to be affected.

All industry breakdowns can be found in the accompanying dataset.

Businesses not permanently stopped trading were asked if they experienced a change in the number of cancellations from customers in the last month.

The other service activities industry, which includes hairdressing and other beauty treatments, had the highest proportion of businesses reporting increased cancellations in the last month, at 64%, a 14-percentage point increase from the month before.

Nearly half (44%) of businesses in the accommodation and food service activities industry reported an increase in cancellations. At sub-industry level, the accommodation sub-industry had 67% reporting they had experienced an increase in cancellations in the last month, compared with 41% in the food and beverage service activities sub-industry.

Businesses not permanently stopped trading were asked if they were using or intending to use safety measures in the workplace in early January 2022. The top three safety measures reported were: 

• hygiene measures (47%)

• social distancing (46%)

• Personal Protective Equipment (PPE) (41%)

In late December 2021, the UK reintroduced firmer restrictions on the use of PPE and social distancing in public settings. In early January 2022, the use of PPE was up 4 percentage points from late October 2021. The other service activities industry reported the highest percentage of businesses using PPE in early January 2022, at 80%.

In October 2021, some nations introduced customer coronavirus (COVID-19) checks. In Scotland, coronavirus (COVID-19) vaccination certificates were introduced and in Wales, NHS COVID Passes were introduced. Of businesses not permanently stopped trading, 11% reported to be using or intending to use customer coronavirus (COVID-19) checks in early January 2022, up from 7% in late October 2021.

Businesses not permanently stopped trading and were using or intending to use one of the safety measures listed in the survey were also asked if the implementation for those measures affected their operating costs.

More than half (55%) of businesses reported that implementing safety measures had resulted in an increase in their operating costs, with 8% reporting costs increased substantially and 47% reporting costs had increased a little.

The top three industries where costs had increased substantially were the arts, entertainment and recreation industry (17%), the accommodation and food service activities industry (17%) and the construction industry (12%).

Coronavirus

Coronaviruses are a family of viruses that cause disease in people and animals. They can cause the common cold or more severe diseases, such as COVID-19.

COVID-19

COVID-19 is the name used to refer to the disease caused by the SARS-CoV-2 virus, which is a type of coronavirus. The Office for National Statistics (ONS) takes COVID-19 to mean presence of SARS-CoV-2 with or without symptoms.

Reporting unit

The business unit to which questionnaires are sent is called the reporting unit. The response from the reporting unit can cover the enterprise as a whole or parts of the enterprise identified by lists of local units.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Business Insights and Conditions Survey (BICS) QMI, published on 20 May 2021.

The BICS is voluntary, and the results are experimental.

The results are based on responses from the voluntary fortnightly BICS, which captures businesses' views on financial performance, workforce, prices, trade, and business resilience. The Wave 47 survey was live for the period 29 December 2021 to 9 January 2022. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 13 December to 26 December 2021. For questions regarding the last month, businesses were asked for their experience for the reference period 13 December 2021 to 9 January 2022. However, businesses may respond from the point of completion of the questionnaire (29 December 2021 to 9 January 2022). The survey questions are available.

Coverage

The Monthly Business Survey (MBS) covers the UK for production and only Great Britain for services. The Retail Sales Index (RSI) and Construction are Great Britain-focused. Therefore, the BICS will be UK-focused for production-based industries but Great Britain-focused for the other elements of the economy covered.

The industries covered are:

• non-financial services (includes professional, scientific, communication, administrative, transport, accommodation and food, private health and education, and entertainment services)

• distribution (includes retail, wholesale, and motor trades)

• production (includes manufacturing, oil and gas extraction, energy generation and supply, and water and waste management)

• construction (includes civil engineering, housebuilding, property development and specialised construction trades such as plumbers, electricians, and plasterers)

The following industries are excluded from the survey:

• agriculture

• public administration and defence

• public provision of education and health

• finance and insurance

For more information on the methodology of producing the Business Insights and Conditions Survey (such as weighting), please see the BICS QMI.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Business Insights and Conditions Survey (BICS) QMI.