Business insights and impact on the UK economy: 1 July 2021

• The percentage of businesses currently trading has increased steadily from 71% in January 2021 to 88% in late June 2021, the highest percentage since comparable estimates began in June 2020.
• The proportion of businesses’ workforce reported to be on full or partial furlough leave has fallen from 20% in late January 2021 to its lowest level since the furlough scheme began, at 6% (provisional confidence interval: 5% to 7%) in early June 2021, as a result of coronavirus (COVID-19) restrictions being relaxed across the UK.
• The percentage of currently trading businesses that reported turnover was lower than normal has continued to fall, from 65% in June 2020 to 30% in early June 2021.
• 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.
• The transportation and storage industry had the lowest percentage of businesses currently trading in late June 2021, at 76%; this has steadily declined from 94% in early October 2020, at a time when a shortage of lorry drivers was being reported in some media.
• Switching to LED bulbs is the most reported action that businesses not permanently stopped trading have taken, and intend to take, to reduce carbon emissions.

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

• 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 33 of the Business Insights and Conditions Survey (BICS), which was live for the period 14 to 27 June 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 31 May to 13 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.

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

Notes:

1. Final weighted results, Wave 7 to Wave 33 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: for presentational purposes, cash reserves categories between zero and three months have been combined, and the option “Not sure” has been removed.
7. Workforce: for presentational purposes, the options “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 88% in June 2021. This is the highest percentage of businesses currently trading since comparable estimates began in June 2020, and higher than in late September and early October 2020 when fewer coronavirus (COVID-19) restrictions were in place across the UK.

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 fallen to 30% in early June 2021 – the lowest percentage recorded since comparable estimates began in June 2020
• the percentage of businesses experiencing an increase in turnover has remained generally stable and stood at 14% in early June 2021

Within the industries covered by the BICS sample, the proportion of businesses’ workforce that are reported to be on full or partial furlough leave (the Coronavirus Job Retention Scheme (CJRS)) has fallen from around 20% in late January 2021 to 6% in early June 2021 (we have provisionally calculated that these estimates have a standard error of 0.5% and a coefficient of variation of 4.1%¹, which means there is an approximate range of between 5% to 7% 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 6% (with a confidence interval range of 5% to 7%) of businesses’ workforce reported to be on full or partial furlough leave in early June 2021 suggests that approximately 1.3 to 1.9 million people were furloughed within the industries surveyed in BICS, although please note that this is an early survey-based estimate rather than official statistics, which are published later by Revenue and Customs (HMRC). Surveys by definition collect information from only a proportion of companies, a point reflected in the existence of standard errors, and collect information via a questionnaire which can lead to differences from administrative data, which is the source of the official statistics.

The BICS number is based on multiplying the BICS weighted furlough proportions by HMRC CJRS official statistics eligible employments² 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 the BICS-derived estimates as they are 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 statistics, 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.

Of the workforce that are reported to be on full or partial furlough leave, 48% were reported to be fully furloughed in early June 2021. This is the lowest proportion of furloughed employees reported to be fully furloughed since the question was introduced in October 2020. The figure has steadily fallen from 69% in mid-March 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.

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. Initial standard error and coefficient of variation values for BICS Wave 33 proportion of workforce on furlough. These are provisional, subject to revision, and are reflective of the businesses responding to BICS, so are not fully representative of the true proportion or number of employees on furlough.
2. 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 trading status, from 71% currently trading in January 2021, to 88% in late June 2021. Both the other service activities industry, and human health and social work activities industry are reporting the highest currently trading percentages since October 2020, at 100%.

The two industries most affected by coronavirus (COVID-19) restrictions in 2020 and early 2021 were accommodation and food service activities, and arts, entertainment and recreation. However, both industries have seen the largest movements in trading status, increasing from 37% to 91%, and 49% to 93%, from January to June 2021 respectively.

The transportation and storage industry had the lowest percentage of businesses currently trading in late June 2021, at 76%, which has fallen from 94% in early October 2020. The low percentage in late June 2021 is driven by freight transport by road, which reported 36% of businesses are temporarily closed, paused trading, or permanently ceased trading. This is possibly linked to recent reports of the industry experiencing a shortage of lorry drivers, where 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 the business currently trading in any capacity. It does not cover whether a business has completely reopened to trading at full capacity, 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 that reported turnover was lower than normal has continued to fall, to 30% in early June 2021.

In early June 2021 the arts, entertainment and recreation industry, the other service activities industry, and the accommodation and food service activities industry had the highest percentage of businesses experiencing a decrease in turnover, compared with normal expectations for this time of year.

For the accommodation and food services industry, the proportion of businesses experiencing a decrease in turnover compared with normal expectations has declined from 81% in January 2021 to 52% in early June 2021.

Similarly, in the arts, entertainment and recreation industry, the proportion of businesses experiencing a decrease in turnover compared with normal expectations has fallen from 73% in February 2021 to 63% in early June 2021.

Workforce

Although the percentage of the workforce reported to be on partial or full furlough leave fell and is again the lowest reported percentage since the furlough scheme began, some industries continue to have a notably higher percentage of their workforce on furlough leave. The arts, entertainment and recreation industry reported the highest proportion of their workforce to be on furlough leave, at 18%, followed by the other service activities industry, at 16%.

In trend terms, half of industries not permanently ceased trading have reported their lowest proportion of workforce on partial or full furlough leave since the pandemic began. The largest movement in the data is seen in the arts, entertainment and recreation industry (fallen by 3 percentage points) in early June 2021 compared with late May 2021.

Of the proportion of businesses currently trading and returning from furlough leave, roughly 30% of their workforce are mainly working at the same place they were working before the pandemic.

Of currently trading businesses, 11% had exported and 12% imported in the last 12 months and 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 33 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%, and has remained broadly stable since then. 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 has remained broadly stable between Wave 32 and Wave 33.

Further industry and size band breakdowns of trade questions are available in the accompanying dataset.

Businesses not permanently stopped trading were asked if their business had taken any actions, and if they intend to take actions in the next 12 months, to reduce carbon emissions.

Table 1 shows the percentage of not permanently stopped trading businesses, that have taken and intend to take actions to reduce carbon emissions.

Actions taken, and intended to be taken, to reduce carbon emissions, among businesses not permanently stopped trading were as follows:

• 29% reported they had switched to using LED bulbs and 11% intend to switch to using LED bulbs
• 16% reported they had adjusted heating and cooling systems and 9% intend to adjust heating and cooling systems
• 12% reported they had installed a smart meter and 6% intend to install a smart meter

A large proportion of not permanently stopped trading businesses responded that they had not or did not intend to take any actions in the next 12 months to reduce carbon emissions, at 46% and 42% respectively.

Businesses not permanently stopped trading were asked if their international trade in services had changed in the last 12 months, and how their trade in international services in the last two weeks compares with normal expectations for this time of year.

Of businesses not permanently ceased trading, 4% reported their trade in international services had changed in the last 12 months. Of these businesses, half reported that in the last two weeks they had either not been able to trade or had been trading but less than normal.

Further industry and size band breakdowns of trade questions are available in the accompanying dataset.

This dataset includes additional information collected as part of the survey not presented in this publication.

These data are not official statistics but have been developed to deliver timely indicators to help understand the impact of the coronavirus (COVID-19) pandemic and other events in a timely way.

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 33 survey was live for the period 14 to 27 June 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 31 May to 13 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 for production-based industries but Great Britain 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.