Business insights and impact on the UK economy: 15 July 2021

• The proportion of businesses' workforce reported to be on full or partial furlough leave fell to 5% in late June 2021 (provisional range of 4% to 6%) as a result of coronavirus (COVID-19) restrictions being relaxed across the UK; and the proportion of the workforce reported to be on partial furlough is now higher than on full furlough.

• The transportation and storage industry had the lowest percentage of businesses currently trading in early July 2021, at 81% (lower than 89% for all industries), at a time when a shortage of lorry drivers was being reported in some media. This is below the 94% reported in early October 2020.

• The proportions of businesses experiencing challenges in importing and exporting are broadly unchanged since January 2021, with additional paperwork remaining the top challenge faced by businesses for importing and exporting.

• 24% of currently trading businesses reported that the prices of materials, goods or services bought in the last two weeks had increased by more than normal price fluctuations, and in contrast, only 8% of businesses currently trading reported that they had increased the price of goods or services sold.

• Of business not permanently stopped trading, just over 4 in 10 provided no training to furloughed staff.

More commentary on the impacts of the coronavirus (COVID-19) pandemic on the UK economy and society is available:

• Economic activity and social change in the UK, real-time indicators

• Coronavirus and the social impacts on Great Britain

The data presented here are final results from Wave 34 of the Business Insights and Conditions Survey (BICS), which was live for the period 28 June to 11 July 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 14 to 27 June 2021.

For experimental single-site weighted regional estimates up to Wave 30 (17 to 30 May 2021), please see Understanding the business impacts of local and national restrictions, UK: May 2021. An updated article including data up to Wave 34 (28 June to 11 July 2021) will be published 20 July 2021.

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

Notes:

1. Final weighted results, Wave 7 to Wave 34 of the Office for National Statistics’ (ONS’) Business Insights and Conditions Survey (BICS).
2. Weighted estimates are available from Wave 7 onwards only. The sample redesign in Wave 7 improves our coverage for the small-sized businesses, allowing for weighted results to be truly reflective of all businesses.
3. Data are plotted in the middle of the two-week period of each wave.
4. Trading status: for presentational purposes, currently trading categories and paused trading categories have been combined.
5. Financial performance: for presentational purposes, decreased turnover categories and increased turnover categories have been combined, and the option “Not sure” has been removed.
6. Business resilience: data for Wave 34 is not available as the question has been rotated out of the questionnaire but will return for Wave 35.
7. Workforce: for presentational purposes, the option “Made permanently redundant” or “Other” have been removed. From Wave 33, the response options changed: “On sick leave or not working because of coronavirus (COVID-19), self-isolation or quarantine” was removed, “Working from home instead of at their normal place of work” has changed to " Mainly working from home, instead of where they were working before the pandemic”, and “Working at their normal place of work” has changed to “Mainly working at the same place they were working before the pandemic”.
8. Financial performance and Workforce: Businesses were asked for their experiences for the reference period. However, for questions regarding the last two weeks, businesses may respond from the point of completion of the questionnaire.

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The percentage of businesses currently trading has increased steadily from 71% in January 2021 to 89% in early July 2021, the highest percentage of businesses currently trading since comparable estimates began in June 2020.

Businesses currently trading were asked how their turnover compared with normal expectations for this time of year:

• the percentage of businesses experiencing a decrease in turnover has steadily declined from 65% when comparable estimates began in June 2020, to 30% in early to late June 2021 - the joint lowest percentage recorded

• the percentage of businesses experiencing an increase in turnover has remained stable at 14% from April to late June 2021

• the percentage of businesses experiencing no effect to turnover has slowly increased from 38% in January 2021 to 46% in late June 2021 - the highest percentage recorded since comparable estimates began in June 2020

The proportion of businesses' workforce that are reported to be on full or partial furlough leave (the HM Revenue and Customs (HMRC) Coronavirus Job Retention Scheme (CJRS)) has fallen from around 20% in late January 2021 to 5% in late June 2021 (representing an approximate range of between 4% to 6% of businesses' workforce), as a result of coronavirus restrictions continuing to be relaxed across the UK. This is the lowest proportion of businesses' workforce reported to be on furlough leave since the furlough scheme began.

The estimated 5% of businesses' workforce reported to be on full or partial furlough leave in late June 2021 suggests that approximately 1.1 to 1.6 million people were furloughed within the industries surveyed in BICS. Besides this range, there are other reasons why figures from BICS and the CJRS experimental statistics can differ:

• BICS does not cover all industries, and some staff will have been put on furlough in industries not surveyed by BICS

• BICS results are early survey-based estimates rather than experimental statistics, which are published later by HMRC

• surveys by definition collect information from only a proportion of organisations which can lead to differences with the full coverage which is available from administrative data

• in BICS, businesses were asked for their experiences for the reference period, however, for questions regarding the last two weeks, particularly during periods of rapid change (such as recent reducing levels of furlough) some businesses’ responses might reflect their circumstances at the time of completion of the questionnaire – rather than for the reference period

• over half of BICS survey responses from Wave 34 were submitted during the period 14 to 16 June 2021

The BICS number is based on multiplying the BICS weighted furlough proportions by HMRC CJRS official statistics eligible employments¹ for only those industries covered by the BICS sample (exceptions from BICS are agriculture, public administration and defence, public provision of education and health, and finance and insurance). Therefore, caution should be taken when interpreting this figure as it is based solely on results from BICS, which does not capture all businesses that have employees on furlough. This means that it is not fully representative of the true number of employees on furlough. Figure 2 shows the relationship between the BICS early estimates and HMRC's CJRS official estimaes, to 31 May 2021, to demonstrate the impact of the points made in relation to BICS estimates.

For an overview of the differences between the fortnightly BICS furlough estimates HMRC's CJRS data, please see the Description of methods section in: Comparison of furloughed jobs data, UK: March 2020 to January 2021.

Among the workforce that were reported to be on full or partial furlough leave in late June 2021, 48% were reported to be fully furloughed. This is consistent with Wave 33 and is the lowest proportion of furloughed employees reported to be fully furloughed since the question was introduced in October 2020.

As of late May 2021, we estimate that more people are now on partial furlough than full furlough leave, with both the proportion of employees on full and partial furlough decreasing. This would indicate that more of the workforce are returning to some sort of work part time.

The proportion of the workforce on full furlough has steadily fallen from 69% in late February 2021 when the whole UK was subject to increased coronavirus regulations.

Since the start of the coronavirus pandemic, working patterns have also changed substantially.

In the last two weeks, currently trading businesses reported that 11% of their workforce have moved from furlough or fully homeworking to a hybrid model of working, for example, spending at least some of their time at their usual place of work. An extra 8% of the workforce that were on partial or full furlough leave are fully back to their working patterns before the pandemic.

In the next two weeks, 9% of the workforce of not permanently ceased trading businesses are expected to move to a hybrid model of working.

Notes for: Headline figures

1. An "employment" in the HMRC CJRS Official Statistics is defined as anyone who meets the scheme criteria set out within the published guidance, and data come from the whole population of HMRC. CJRS claims (those applied) and Pay As You Earn (PAYE) Real Time Information systems (RTIs). The assessment of whether a person was employed on the qualifying dates is based on the methodology used for the joint HMRC and ONS statistics release, Earnings and employment from Pay As You Earn Real Time Information.

Trading status

Across all industries, there has been a steady increase in the percentage of businesses that are currently trading, standing at 89% in early July 2021. This is up from 72% in the same period last year when some restrictions were lifted in England.

The two sectors most affected by coronavirus restrictions in 2020 were the arts, entertainment and recreation industry, and the accommodation and food service activities industry. They have seen the largest movements in currently trading businesses year on year, increasing from 34% to 91%, and 41% to 94% respectively.

The professional, scientific and technical activities industry reported 83% of businesses currently trading in early July 2021. This industry is notable because it has fallen within the bottom three currently trading industries for the first time since late September 2020.

The transportation and storage industry had the lowest percentage of businesses currently trading in early July 2021 at 81%, down from 94% in early October 2020. The low percentage in recent months is possibly driven by recent reports of the industry experiencing a shortage of lorry drivers, as training and testing of new drivers has not been possible during the pandemic.

It should be noted that the definition of "currently trading" used within the Business Insights and Conditions Survey (BICS) refers to a business currently trading in any capacity. It does not cover whether a business has completely reopened to trading at full capacity as experienced before the coronavirus pandemic, or if the business is operating at a reduced level of capacity but is still trading.

Financial performance

The percentage of currently trading businesses reporting that their turnover was lower than normal remained unchanged at 30% in late June 2021.

The arts, education and recreation industry reported that 57% of businesses are experiencing a decrease in turnover compared with normal levels for this time of year (late June 2021). This is down from 72% in January 2021. It is the lowest percentage reported since comparable estimates began in June 2020.

Of businesses currently trading, 46% reported that turnover has not been affected, which is the highest percentage recorded since comparable estimates began in June 2020. This has risen from 20% in June 2020.

Workforce

The proportion of the workforce reported to be on partial or full furlough leave was more than 10% for three industries: the arts, education and recreation industry, the other service activities industry, and the transportation and storage industry, at 15%, 13%, and 11%, respectively.

The proportion of the workforce reported to be mainly working at the same place they were before the pandemic remained unchanged from early to late June 2021, at 64%.

The proportion of the workforce reported to be mainly working from home instead of where they were working before the pandemic remained consistent. It slightly fell from 28% in early June to 27% in late June 2021.

In response to being asked "does your business expect to make any of your workforce redundant over the next 3 months?", approximately 1% of businesses not permanently stopped trading responded "yes" in early July 2021. This is the lowest percentage of businesses expecting to make redundancies since the question was introduced in December 2020.

The top three industries reported to be making redundancies over the next three months were:

• administrative and support services activities – 3%

• manufacturing – 3%

• wholesale and retail trade; repair of motor vehicles and motorcycles – 2%

Of the 1% of businesses expected to make redundancies in the next three months, the majority (85%) plan to make the redundancies in one to three months.

The manufacturing industry and administrative and support service activities reported that the highest proportion of businesses expect to make redundancies over the next three months at 3%.

Across all industries, the top two reasons given by businesses making redundancies are that certain job roles are no longer being required (68%) and that there is a need to reduce staff costs (36%).

Caution should be taken when interpreting these results. Based on the specific routing of this question, only a small number of businesses responded.

Of currently-trading businesses, 11% had exported and 14% had imported in the last 12 months. They reported how their exporting or importing 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 two weeks.

Figure 7: Exporting and importing figures from the Business Insights and Conditions Survey

Notes:

1. Final weighted results, Wave 12 to Wave 34 of the Office for National Statistics’ (ONS’) Business Insights and Conditions Survey (BICS).
2. Data are plotted in the middle of the two-week period of each wave.
3. Exporting or importing compared to normal expectations: Percentage of businesses currently trading and had reported they had exported/imported in the last year. For presentational purposes, “exporting/importing, but less than normal” and “not been able to export/import in the last two weeks” have been combined.
4. Experiencing a challenge: Percentage of businesses currently trading that are experiencing a challenge in exporting/importing, who had exported/imported in the last 12 months and who reported how exports/imports compared with normal expectations.
5. Exporting/importing challenges: Percentage of businesses currently trading, who had exported/imported in the last 12 months and who reported how exports/imports compared with normal expectations. Rows will not sum to 100% because businesses could select multiple options. Some options have been edited to fit onto the graph.
6. 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.
7. Businesses were asked for their experiences for the reference period for each wave, however, for questions regarding the last two weeks, businesses may respond from the point of completion of the questionnaire.
8. Data for the period 2 November to 13 December 2020 have been modelled due to changes to the routing of the question at this time.

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The proportion of currently trading businesses experiencing a challenge in importing and exporting increased from December 2020 until January 2021 to be over 50%. This proportion has remained broadly stable since then but with some increase in recent weeks. The data suggest businesses are more likely to be experiencing an importing challenge than an exporting challenge.

The proportion of currently trading businesses experiencing the top three challenges in importing and exporting (additional paperwork, customs duties or levies, and change in transportation costs) has remained broadly stable between Wave 33 and Wave 34.

Further industry and size band breakdowns of trade questions are available in the accompanying dataset. This includes the introduction of an unweighted timeseries produced by linking samples from the Annual Business Survey (2018) and the Annual Survey of International Trade in Services (2019) to the BICS microdata. A detailed description of the methodology can be found in this article.

Nearly a quarter (24%) of businesses currently trading reported that the prices of materials, goods or services bought in the last two weeks had increased more than normal price fluctuations. This has increased slightly from 21% in late May 2021, but has increased considerably from the 14% of businesses at the end of 2020 (14 to 27 December 2020).

Industries with the highest proportion of businesses reporting increases in prices of materials, goods and services bought in the last two weeks were construction (45%), manufacturing (40%), accommodation and food service activities (37%), and wholesale and retail trade (36%).

By contrast, only 8% of businesses currently trading reported that they had increased the price of goods or services sold. This is the same as in late May 2021, but up from 4% in late December 2020.

Businesses not permanently stopped trading were asked if they provided any training to the workforce while they were furloughed and if they provided training after the workforce had returned to work. Just over 4 in 10 businesses provided no training to furloughed staff. Of the businesses that responded:

• 18% had provided training both during and after the workforce returned from furlough

• 43% of businesses had not provided training while the workforce was on furlough, and 28% had not provided training after the workforce returned from furlough

• 15% of businesses were not sure if they had trained the workforce during furlough, and 20% were not sure if they had trained the workforce after they returned from furlough

• 25% of businesses responded "not applicable" to if they had trained the workforce during furlough, and 34% responded "not applicable" to if they had trained the workforce after they returned from furlough

Businesses not permanently stopped trading were also asked which skills were in high demand in the last 12 months, and in which skills their workforce required extra support or training.

Businesses not permanently stopped trading have seen the greatest increase in demand over the last 12 months for management or leadership skills and customer service skills, both at 13%.

However the current workforce in businesses not permanently stopped trading require the greatest extra support in advanced digital skills and management or leadership skills, both at 7%.

Access to microdata

The BICS microdata for Waves 1 to 33 can now be accessed via the Secure Research Service (SRS). The BICS microdata for each wave are released on a rolling basis in the week following the publication of each wave.

The microdata are confidentialised and do not disclose any specific business.

Only researchers accredited under the Digital Economy Act are able to access data in the SRS. You can apply for accreditation through the Research Accreditation Service (RAS). You need to have relevant academic or work experience and must successfully attend and complete the assessed Safe Researcher Training.

To conduct analysis with microdata from the SRS, a project application must be submitted to the Research Accreditation Panel (RAP). To access the SRS, you must also work for an organisation with an Assured Organisational Connectivity agreement in place.

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.

EU exit transition period

The EU exit transition is the period agreed in the UK-EU Withdrawal Agreement in which the UK is no longer a member of the EU but continues to be subject to EU rules and remains a member of the single market and customs union. When the UK left the EU on 31 January 2020, it entered the transition period. The transition period came to an end on 31 December 2020.

Furlough

Furlough is a temporary absence from work allowing workers to keep their job while the coronavirus (COVID-19) pandemic continues.

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 BICS QMI, published 20 May 2021.

The Business Insights and Conditions Survey (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 34 survey was live for the period 28 June to 11 July 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 14 to 27 June 2021. The survey questions are available.

Coverage

The Monthly Business Survey (MBS) covers the UK for production and only Great Britain for services. The 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.