Business insights and impact on the UK economy: 26 August 2021

• Transportation and storage remained the industry with the lowest percentage of businesses currently trading, at 82%, compared with 90% businesses in all industries. 

• The proportion of businesses' workforce reported to be on full or partial furlough leave (the HM Revenue and Customs (HMRC) Coronavirus Job Retention Scheme (CJRS)) was 7% in early August 2021, in line with the estimate in late July 2021.

• More than three-quarters of businesses have high or moderate confidence they will meet their debt obligations.

• Of businesses not permanently stopped trading, 18% intend to use increased homeworking as a permanent business model going forward; this percentage has remained generally stable since April 2021.

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

Please note, as part of our regular and ongoing quality assessment of our methods we have introduced improved methods to the weighting of smaller businesses within the Business Insights and Conditions Survey (BICS) sample where we use employment and turnover to do so. In the main, previous findings remain unaffected, there are, however, revisions to estimates for certain variables, including turnover, business resilience and proportion on full or partial furlough.

The headline weighting method of qualitative questions, previously weighted by turnover or employment, has been updated to be weighted by count (including turnover and business resilience). This is to better reflect the smaller businesses in the results. Variables that were previously weighted by either employment or turnover will continue to be available in the accompanying dataset, weighted by count as well as employment or turnover.

The data presented here are final results from Wave 37 of BICS, which was live for the period 9 August to 22 August 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 26 July to 8 August 2021.

These dates should be kept in mind in relation to the easing of coronavirus (COVID-19) restrictions. Dependent on the location and date when the business responded, the easing of restrictions could have had an impact on the estimates.

The reference period overlaps the date when a large-scale relaxation of restrictions in Wales was introduced on 7 August 2021. However, a variety of restrictions remain in place for other nations.

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. Final weighted results, Wave 7 to Wave 37 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. Trading status: for presentational purposes, currently trading categories and paused trading categories have been combined.
4. Business resilience: for presentational purposes, cash reserves categories between zero and three months have been combined, and the option "Not sure" has been removed. Data for Wave 36 is not available as the question was rotated out of the questionnaire and so it is compared with Wave 35.
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. Workforce: for presentational purposes, the options “Made permanently redundant”, "On sick leave or not working due to coronavirus (COVID-19), self-isolation or quarantine" and “Other” have been removed. From Wave 33, the response options for this question were updated but should not have had an effect on the percentages displayed here.

Download the data

Headline figures for turnover and business resilience have been updated to reflect data weighted by count (historically by turnover). Our main findings have not been affected; however, the data have been revised to better reflect the smaller businesses in the results.

The percentage of businesses currently trading was 90% in mid-August 2021. This figure has remained stable since late June 2021, following an increase from 71% in January 2021.

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

• the percentage of businesses reporting a decrease in turnover was 30%

• the percentage of businesses reporting an increase in turnover was 9%

• the percentage of businesses reporting no effect to turnover was 49%

The percentage of businesses that reported less than three months cash reserves is 37%, which is higher than the previously published value in late July 2021 (formerly weighted by turnover). Due to the updated weighting method, smaller businesses (businesses with 0 to 9 employees) are reflected more in the results, which are more likely to have less cash reserves than larger businesses.

The proportion of businesses' workforce reported to be on full or partial furlough leave (the HM Revenue and Customs (HMRC) Coronavirus Job Retention Scheme (CJRS)) remains stable at 7% in early August 2021 (representing a provisional approximate range of between 6% to 8% of businesses' workforce), the same as in late July 2021. This is the joint lowest proportion of businesses' workforce reported to be on furlough leave since the furlough scheme began.

The revision of the BICS weighting methodology has resulted in BICS not permanently stopped trading business furlough estimates being slightly higher than CJRS figures, when previously they were slightly lower.

The survey reference period covers 1 August 2021, at which point the furlough scheme changed, with government contributions reducing from 70% in July 2021 (and 80% prior to that), to cover up to 60% of an employee's earnings. The furlough scheme is set to end on 30 September 2021.

The estimated 7% of businesses' workforce reported to be on full or partial furlough leave in early August 2021 suggests that approximately 1.6 to 2 million people were furloughed within the industries surveyed in BICS.

The BICS number is based on multiplying the BICS weighted furlough proportions by the number of eligible employments¹ published in the HMRC CJRS official statistics, for only those industries covered by the BICS sample (exclusions from BICS are agriculture, public administration and defence, public provision of education and health and finance and insurance). Therefore, the BICS estimate is not fully representative of the true number of employees on furlough.

Figure 2 shows the relationship between the revised BICS early estimates of not permanently ceased trading, currently trading and temporarily closed or paused trading businesses in comparison to the HMRC's CJRS official statistics, up to 30 June 2021.

For current point estimates, and looking forward as coronavirus regulations are relaxed, it is recommended to use the "not permanently stopped trading" business estimates, as the number of responding businesses in industries highly affected by heightened coronavirus restrictions has increased with relaxation of restrictions.

It is recommended to use the BICS ‘currently trading series’ when reviewing as a time series or looking backwards when there were heightened coronavirus restrictions on businesses. However, please note that the BICS ‘currently trading series’ represents a lower range for the percentage of the workforce on furlough leave, as the estimate does not contain paused trading businesses, which typically had a higher proportion of their workforce on furlough.

We make these recommendations, as getting a response from paused traders, which increased during certain periods of the pandemic, was more difficult, particularly as business behaviours were adapting quickly during periods of changing restrictions making estimation more difficult. There is therefore more volatility and uncertainty for these traders. As a result, the ‘BICS currently trading series’ should be used as a historic comparator, but this would represent a lower range for the percentage of furlough given that this does not include paused traders.

An updated overview of the differences between the fortnightly BICS furlough estimates and HMRC's CJRS figures, will be published 2 September 2021

On 1 July 2020, the option to partially furlough employees was introduced for employers. With this option employers can furlough their employees for part of their usual hours, with the employee free to work the remainder. This was in addition to the fully furloughed option.

Among the workforce reported to be on full or partial furlough leave in early August 2021, 39% were reported to be fully furloughed. This has steadily declined from 69% in mid-January 2021 and is the lowest proportion of furloughed employees reported to be fully furloughed since the question was introduced in October 2020.

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. The 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

The transportation and storage industry had the lowest percentage of businesses currently trading in mid-August 2021, at 82%. The high percentage of paused and not permanently ceased traders is partly driven by the freight transport by road industry and the unlicensed carriers industry. It has been reported that this industry has been experiencing a shortage of lorry drivers.

The administrative and support service activities industry, the information and communication industry, the professional, scientific and technical activities industry and the real estate industry all had the second lowest proportion of businesses currently trading, at 86% in mid-August 2021. This has remained broadly unchanged since early August 2021.

It should be noted that the definition of currently trading used within the 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, as experienced before the coronavirus (COVID-19) pandemic or if the business is operating at a reduced level of capacity but is still trading.

Financial performance

In the education (private sector and higher education businesses only) industry, 54% of businesses reported experiencing a decrease in turnover in the last two weeks compared with normal levels for this time of year, in early August 2021. This has increased from 31% in early April 2021. The high percentage is partly driven by the other education not elsewhere classified (NEC) industry, which includes, but not limited to, education that is not definable by level and/or computer training.

One industry particularly affected by the coronavirus pandemic was the accommodation and food service activities industry. However in late July, 18% reported turnover had increased compared with normal expectations for this time of year.

Workforce

Almost one-quarter (24%) of the workforce in the other service activities industry were reported to on partial or full furlough leave. Within this industry, the highest proportions of the workforce reported to be on furlough leave is in the hairdressing and other beauty treatment industry.

In early August 2021, businesses reported 1% of their workforce on sick leave or not working due to coronavirus (COVID-19), self-isolation or quarantine and has remained stable since comparable estimates began in June 2020.

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 37 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. 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.
5. 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.
6. 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.

Download the data

The proportion of currently trading businesses that experienced a challenge in importing decreased from 63% in late July 2021 to 57% in early August 2021, after remaining stable following a sharp increase in January 2021. The proportion of currently trading businesses that experienced a challenge in exporting has remained broadly stable since January 2021, following a similar increase from December 2020. The data suggests businesses are more likely to be experiencing an importing challenge than an exporting one.

Additional paperwork and transportation costs were reported as the top challenges for exporting and importing, respectively. The proportion of currently trading businesses experiencing these challenges has remained broadly stable since early May 2021 for exporting and importing.

For importing, the proportion of businesses that reported that transportation costs were a challenge saw a decrease from 47% in early July 2021 to 42% in early August 2021.

Businesses that are currently trading were also asked what they were exporting or importing in the last 12 months. These businesses said that:

• 55% exported and 81% imported goods only

• 34% exported and 10% imported services only

• 10% exported and 9% imported both goods and services

• 1% was not sure for exporting and less than 1% was not sure for importing

Further industry, size band and breakdowns of trade questions by what they are exporting or importing (goods, services or both) are available in the accompanying dataset.

Almost half of businesses not permanently stopped trading reported their debt repayments have increased compared with normal expectations over the last month. Of all businesses:

• 16% reported an increase of more than 50%

• 7% reported an increase of between 20% and 50%

• 23% reported an increase of up to 20%

• 43% reported repayments had stayed the same

• 3% reported repayments decreased

• 8% reported they were not sure how their repayments compared with normal expectations

Businesses were also asked, how much confidence they had that they will meet their debt obligations.

Businesses were asked, since the start of the coronavirus pandemic (COVID-19), has the business reduced the terms and conditions of any of their workforce.

Across all industries:

• 3% responded yes

• 58% responded no

• 6% responded not sure

• 29% responded not applicable

• 4% responded prefer not to say

The other service activities industry and the education (private sector and higher education businesses only) industry reported the highest percentage of businesses who responded "yes", at 14% and 11% respectively. The high percentage is partly driven by the hairdressing and other beauty treatment industry and the other education not classified elsewhere (NEC) industry, respectively.

Of those businesses who responded "yes" within the education (private sector and higher education businesses only) industry, 79% of businesses reported this applied to "above 75% of the workforce".

Businesses not permanently ceased trading were asked if they were able to get the materials, goods or services they needed from within the UK in the last two weeks.

Across all industries, 7% reported they were not able to get the materials, goods or services needed from within the UK in the last two weeks, this has remained unchanged from early July 2021. The construction industry reported the largest percentage at 15%, followed by the wholesale and retail trade; repair of motor vehicles and motorcycles industry at 11%.

Across all industries, 9% reported they were able to get the materials, goods or services they needed from within the UK in the last two weeks, but had to change suppliers or find alternative solutions to do so, this is up from 8% in early July 2021. Over 17% of businesses in the manufacturing and construction industries reported this, followed by 13% and 11% in wholesale and retail trade industry and accommodation and food service activities industry, respectively.

Businesses not permanently stopped trading were also asked how their stock levels for the last two weeks compared with normal expectations for this time of year.

Of businesses not permanently stopped trading, 4% reported that stock levels were higher than normal, while 13% reported that stock levels were lower than normal. Almost one in four businesses (23%) reported that stock levels had not changed. This has remained stable since late December 2021.

The accommodation and food service activities industry reported the largest percentage of businesses that indicated stock levels were lower (27%), followed by the wholesale and retail trade; repair of motor vehicles and motorcycles industry (25%) and the manufacturing industry (23%).

In recent media, there were reports of some businesses within the accommodation and food service activities industry experiencing supply shortages.

For further information and data on the preparedness of businesses surrounding the continuation of supply chains and stock levels, see the accompanying dataset.

Of businesses not permanently stopped trading, 18% intend to use increased homeworking as a permanent business model going forward, while 19% are not sure. This has remained broadly unchanged from late July 2021.

The information and communication industry and the professional, scientific and technical activities industry had the highest percentages of businesses intending to use increased homeworking as a permanent business model going forwards, at 45% and 33% respectively in mid-August 2021.

In Wave 37, the response option "reduced carbon emissions" was introduced and 38% of businesses reported this was one reason for intending to implement increased homeworking.

Data on full industry breakdowns, including why a business does not intend to use increased homeworking as a permanent business model going forward is available in the accompanying dataset.

Access to microdata

The BICS microdata for Waves 1 to 36 can now be accessed through 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 made confidential and do not disclose information on 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 Business Insights and Conditions Survey (BICS) QMI, published 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 37 survey was live for the period 9 August to 22 August 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 26 July to 8 August  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.