Business insights and impact on the UK economy: 3 December 2020

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

• Coronavirus and the latest indicators for the UK economy and society

• Coronavirus and the social impacts on Great Britain

The new Business insights and impact on the UK economy dataset page contains comprehensive weighted datasets for Wave 7 onwards. This is the first time comprehensive weighted estimates (including industry and size-band breakdowns) have been made available for Waves 7 to 13, resulting in minor revisions to previously published headline estimates. Previously published datasets for Waves 14 to 17 have also been included in this new page, and all future datasets for this release will be made available there.

Previously published unweighted BICS results for Waves 1 to 13 and unweighted regional results up to Wave 17 can still be found on the old Business Impact of Coronavirus (COVID-19) Survey (BICS) dataset page, but the page will no longer be updated.

• The percentage of businesses currently trading has fallen to 77%, a level last lower in Wave 8 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) (29 June to 12 July 2020), at 72%.

• The other service activities industry had the highest percentage of businesses with between zero and three months' cash reserves, at 57%, compared with 31% across all industries.

• The proportion of businesses' workforce on partial or full furlough has increased to 15%, a level last higher in Wave 11 (10 to 23 August 2020), and the arts, entertainment and recreation industry had the highest proportion of its workforce on partial or full furlough leave, at 48%.

• Of businesses currently trading, 6% expect to temporarily or permanently close a business site in the next two weeks.

• 9% of businesses currently trading are fully prepared for the end of the EU transition period with 10% of businesses not sure.

The data presented here are final results from Wave 18 of the Business Impact of Coronavirus (COVID-19) Survey (BICS), which was live for the period 16 to 29 November 2020.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 2 to 15 November 2020.

These dates should be kept in mind in relation to local and national lockdowns and, dependent on the location and date when the business responded, as this could have an impact on the estimates.

Across all industries:

• 75% of businesses had been trading for more than the last two weeks

• 2% of businesses had started trading within the last two weeks after a pause in trading

• 8% of businesses were paused trading but intended to restart in the next two weeks

• 13% of businesses were paused trading and did not intend to restart in the next two weeks

• 2% of businesses had permanently ceased trading

Other service activities industry (which includes hairdressing and other beauty treatment activities) had the lowest percentage of businesses currently trading, at 41%. This was followed by the accommodation and food service activities industry and the arts, entertainment and recreation industry, at 46% and 61% respectively.

The transportation and storage industry had the highest percentage of businesses permanently ceased trading, at 5%. This was followed by the real estate activities industry, and the information and communication industry, at 4% and 3% respectively.

Figure 2 shows the trend in weighted trading status estimates between 15 June 2020 (Wave 7) and 29 November 2020 (Wave 18).

The percentage of businesses currently trading reached a high of 86% in Wave 14 (21 September to 4 October 2020), before gradually falling to 77% in Wave 18 (16 to 29 November 2020). The percentage of businesses currently trading was last lower in Wave 8 of BICS (29 June to 12 July 2020), at 72%.

Table 1 shows how the trading status of larger businesses compares with micro businesses (businesses with fewer than 10 employees). In Wave 18, 76% of micro businesses were currently trading, compared with 90% of businesses with 250 or more employees.

The Business Impact of Coronavirus (COVID-19) Survey (BICS) asks businesses that are currently trading how the coronavirus (COVID-19) pandemic has affected their turnover and their profits, compared with normal expectations for this time of year.

Across all industries, of businesses currently trading:

• 47% experienced a decrease in turnover compared with what is normally expected for this time of year

• 37% experienced no impact on turnover

• 8% experienced an increase in turnover compared with what is normally expected for this time of year

There were four industries where 50% or more of their businesses experienced a decrease in turnover. These were the:

• accommodation and food service activities industry, at 79%

• arts, entertainment and recreation industry, at 73%

• education industry (private sector and higher education businesses only), at 60%

• other service activities industry, at 59%

Conversely, the wholesale and retail trade industry had the highest percentage of businesses experiencing an increase in turnover, at 13%. Additional information on historical data for the retail trade industry is available in Retail sales, Great Britain.

Figure 4 shows the trend in weighted turnover estimates between Wave 7 (1 to 14 June 2020) and Wave 18 (2 to 15 November 2020).

The percentage of businesses experiencing a decrease in turnover compared with what is expected for this time of year had decreased from 65% in Wave 7 (1 to 14 June 2020) to 45% in Wave 16 (5 to 18 October 2020). However, in Wave 17 (19 October to 1 November 2020), the percentage of businesses experiencing a decrease in turnover increased sharply, to 50%, but has decreased again in Wave 18 (2 to 15 November 2020) to 47%.

Across all industries, of businesses currently trading:

• 43% experienced a decrease in profits compared with what is normally expected for this time of year

• 35% experienced no impact on profits

• 6% experienced an increase in profits compared with what is normally expected for this time of year

Three industries had more than 50% of their businesses experiencing a decrease in profits:

• the accommodation and food service activities industry, at 71%

• the arts, entertainment and recreation industry, at 61%

• the other service activities at 60%

Conversely, the wholesale and retail trade industry had the highest percentage of businesses experiencing an increase in profits, at 10%.

Figure 6 shows how the fortnightly turnover estimates from the Businesses Impact of Coronavirus (COVID-19) Survey (BICS) follow the same trends as the published UK monthly gross domestic product (GDP) estimates. This is despite the fact that BICS is published much earlier than the official monthly GDP estimates.

Figure 6: Comparing the fortnightly net balance turnover estimates from BICS to the UK monthly GDP estimates

Net turnover balances of businesses currently trading against GDP monthly estimates, UK, 1 February to 15 November 2020

Notes:

1. Final unweighted results, Wave 1 to Wave 6, and final weighted results, Wave 7 to Wave 18, of the Office for National Statistics' (ONS') Business Impact of Coronavirus (COVID-19) Survey (BICS); businesses currently trading.

2. Weighted net balances have been calculated 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. Monthly gross domestic product (GDP) publications are available.

4. Net balances have been calculated by subtracting the weighted by turnover number of businesses who have reported a decrease in turnover from the weighted by turnover number of businesses with an increase in turnover, all divided by the total weighted number of businesses currently trading for that wave, then scaled up using a scaling factor.

Data download

The Business Impact of Coronavirus (COVID-19) Survey (BICS) asks businesses that have not permanently stopped trading about their business resilience, in terms of how long they think their cash reserves will last and how confident they are that their business will survive the next three months.

Across all industries, of businesses not permanently stopped trading:

• 31% had between zero and three months' cash reserves

• 16% had between four and six months' cash reserves

• 35% had more than six months' cash reserves

The other service activities industry (which includes hairdressing and other beauty treatment activities) and the accommodation and food service activities industry had the highest percentages of businesses with between zero and three months' cash reserves, at 57% and 47% respectively. This was followed by the construction industry and the administrative and support service activities industry, at 39% and 35% respectively.

Conversely, the education industry (private sector and higher education businesses only) and the information and communication industry had the highest percentages of businesses that had cash reserves that would last more than six months, at 44% each.

Across all industries, of businesses not permanently stopped trading:

• 14% had no or low confidence that their business would survive the next three months

• 38% had moderate confidence that their business would survive the next three months

• 40% had high confidence that their business would survive the next three months

The other service activities industry (which includes hairdressing and other beauty treatment activities) and the accommodation and food service activities industry had the highest percentages of businesses that had no or low confidence that their business would survive the next three months, at 47% and 25% respectively.

Conversely, the water supply, sewerage, waste management and remediation activities industry had the highest percentage of businesses that had high confidence that their business would survive the next three months, at 90%. This was followed by the real estate activities industry, at 65%.

Other business resilience variables such as risk of insolvency and debt repayments are available in the accompanying dataset.

Surveyed businesses that have not permanently stopped trading will have differing approaches to the management of employees, whether furloughing staff, working as normal, or other scenarios. Because of the complex nature of this, the data in this section primarily focus on proportions of the workforce within responding businesses as opposed to proportion of businesses as is the case for other sections.

Figure 9 shows the trend in unweighted furlough estimates between Wave 2 (23 March to 5 April 2020) and Wave 6 (18 to 31 May 2020) and weighted furlough estimates between Wave 7 (1 to 14 June 2020) and Wave 18 (2 to 15 November 2020).

In Wave 7 (1 to 14 June 2020), 30% of the workforce were on furlough leave. The proportion of the workforce on furlough leave gradually dropped to 8% in Wave 16 (5 to 18 October 2020). The furlough scheme was extended until March 2021 because of ongoing coronavirus (COVID-19) restrictions, and the proportion of the workforce on furlough has increased to 15% (or approximately 4.9 million employees) in Wave 18 (2 to 15 November 2020). This is likely to be as a result of new restrictions introduced over the survey period.

For an overview of the similarities and differences between the fortnightly Business Impact of Coronavirus (COVID-19) Survey (BICS) furlough estimates and HM Revenue and Customs' (HMRC's) CJRS data, over the period 1 May to 31 July, please see Comparison of furloughed jobs data: May to July 2020.

Across all industries, of businesses not permanently stopped trading:

• 15% of the workforce (or approximately 4.9 million employees) were on partial or full furlough leave

• 31% of the workforce were working remotely instead of at their normal place of work

• 51% of the workforce were working at their normal place of work

The arts, entertainment and recreation industry and the accommodation and food service activities industry had the highest proportions of their workforce on partial or full furlough leave under the terms of the UK government's Coronavirus Job Retention Scheme (CJRS), at 48% and 44% respectively.

The information and communication industry and the professional, scientific and technical activities industry had the highest proportions of their workforce working remotely instead of at their normal place of work, at 78% and 69% respectively.

When interpreting the proportion of the workforce estimates returning from furlough leave or from remote working in the last two weeks, consideration of the industries that had a higher proportion of their workforce furloughed is needed.

Across all industries, of businesses currently trading:

• 10% of the workforce returned from furlough leave to the normal workplace in the last two weeks, either fully or partially

• 4% of the workforce returned from furlough leave to homeworking in the last two weeks, either fully or partially

• 3% of the workforce moved from remote working to the normal workplace in the last two weeks

• 12% of the workforce moved from the normal workplace to homeworking in the last two weeks

In Wave 18, businesses who had not permanently stopped trading were asked a series of questions about their workforce and homeworking.

Across all industries, of businesses not permanently stopped trading:

• 28% had more staff working from home as a result of the coronavirus (COVID-19) pandemic

• 68% did not have more staff working from home as a result of the coronavirus pandemic

The real estate activities industry had the highest percentages of businesses who had more staff working from home as a result of the coronavirus pandemic, at 62%. A full industry breakdown is available in the accompanying dataset.

Conversely, the accommodation and food service activities industry, and the other service activities industry had the highest percentages of businesses who did not have more staff working from home, at 90% and 87% respectively.

Across all industries, of businesses not permanently stopped trading:

• 16% intend to use increased homeworking as a permanent business model in the future

• 68% do not intend to use increased homeworking as a permanent business model in the future

• 16% are not sure if they intend to use increased homeworking as a permanent business model in the future

Of businesses intending to use increased homeworking as a permanent business model in the future, 63% reported it was because of reduced overheads, 49% reported it was because of improved staff well-being, and 38% reported it was because of increased productivity.

Of businesses not intending to use increased homeworking as a permanent business model in the future, 90% reported it was because it was not suitable for their business.

Other effects on the workforce and industry breakdowns are available in the accompanying dataset.

Data regarding the percentages of businesses applying for and receiving the different government schemes and initiatives (including the Coronavirus Job Retention Scheme (CJRS)) can be found in the accompanying dataset.

Businesses that were currently trading were asked if they expect to temporarily or permanently close any businesses sites in the next two weeks and answered this question during the survey period 16 to 29 November 2020. This should be kept in mind in relation to local and national lockdowns and, dependent on the location and date when the business responded, as this could have an impact on the estimates.

Data regarding whether businesses expect to permanently close any businesses sites in the next three months can be found in the accompanying dataset.

Of businesses currently trading, 6% expect to temporarily or permanently close a business site in the next two weeks.

The accommodation and food service activities industry had the highest percentage of businesses expecting to temporarily or permanently close a business site in the next two weeks, at 11%. A full industry breakdown is available in the accompanying dataset.

Of businesses that expect to temporarily or permanently close a business site in the next two weeks (6% of those currently trading), 19% expect to close a business site in Greater London, 16% in the South West of England, and 14% in the South East of England.

Across all industries, of businesses currently trading and who expect to temporarily or permanently close a business site in the next two weeks:

• 71% are closing because of lockdown regulations

• 25% are closing as a result of there being insufficient customer interest or footfall

• 20% are closing because the business is not financially viable to keep open

In Wave 18, businesses that had not permanently stopped trading were asked how the number of workers from within and outside the EU at their business had changed since the start of the coronavirus (COVID-19) pandemic.

Across all industries, of businesses not permanently stopped trading:

• 2% had an increased number of workers from within the EU

• 8% had a decreased number of workers from within the EU

The majority of businesses had the same number of workers from within the EU, at 64%, with an additional 22% not sure how the number of workers from within the EU at their business had changed and 5% preferring not to say.

The accommodation and food service activities industry, the administrative and support service activities industry and the manufacturing industry had the highest percentages of businesses with a decreased number of workers from within the EU, at 20%, 9% and 9% respectively.

For workers from outside the EU, across all industries, of businesses not permanently stopped trading:

• less than 1% had an increased number of workers from outside the EU

• 3% had a decreased number of workers from outside the EU

The majority of businesses had the same number of workers from outside the EU, at 66%, with an additional 25% not sure how the number of workers from within the EU at their business had changed, and 5% preferring not to say.

The industry and size band breakdowns are available in the accompanying dataset.

Across all industries, businesses reported a greater net decrease in the number of workers from within the EU (6% net decrease) compared with the number of workers from outside the EU (3% net decrease).

In Wave 18, businesses that are currently trading were asked if they were prepared for the end of the EU transition period (31 December 2020).

Across all industries, of businesses currently trading:

• 6% are not prepared for the end of the EU transition period

• 18% are somewhat prepared for the end of the EU transition period

• 9% are fully prepared for the end of the EU transition period

• 10% are not sure

The majority of businesses responded that preparation for the end of the EU transition period was not relevant for their businesses, at 58%. Of businesses where preparation for the end of the transition period was relevant, 22% were fully prepared compared with 14% not prepared.

Of businesses where preparation for the end of the transition period was relevant, the transportation and storage industry and the construction industry had the highest percentages of businesses that were not prepared for the end of the EU transition period, at 18% each.

Conversely, of businesses where preparation for the end of the transition period was relevant, the water supply; sewerage, waste management and remediation activities industry and the real estate activities industry had the highest percentages of businesses that were fully prepared for the end of the EU transition period, at 79% and 77% respectively.

Of all businesses currently trading, large businesses with 250 or more employees were more prepared for the end of the EU transition period, with 14% fully prepared and 38% somewhat prepared, compared with micro businesses with 9% fully prepared and 16% somewhat prepared. More information on businesses preparedness for can be found in the accompanying dataset.

Across all industries, 55% of businesses that are only somewhat or not prepared for the end of the EU transition period are not sure what they need to do to prepare.

In Wave 18, businesses that are currently trading were also asked if they were intending to make any changes to supply chains in preparation for the end of the EU transition period (31 December 2020).

Table 3 shows how the responses to the question on intending to change supply chains differs based on the businesses' response to whether they are stockpiling goods from the UK, EU or non-EU suppliers. Overall, 27% of businesses that are stockpiling goods or materials from the EU intend to make changes to their supply chains, compared with just 2% across all businesses.

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

Access to BICS-related microdata

The BICS microdata for Waves 1 to 17 can now be accessed via the Secure Research Service (SRS). The BICS microdata for each wave will be released on a rolling basis in the following week once the publication of each wave is completed.

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 will have 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 have to 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 transition period

The Brexit 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.

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.

The Business Impact of Coronavirus (COVID-19) Survey (BICS) is voluntary and may only reflect the characteristics of those that responded; the results are experimental.

The business indicators are based on responses from the voluntary, fortnightly BICS, which captures businesses' views on the financial performance, workforce, prices, trade, and business resilience. The Wave 18 survey was live for the period 16 to 29 November 2020. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 2 to 15 November 2020. The survey questions are available.

Weighting

Weighted estimates for the BICS have now been developed for all variables that are collected at a UK level. A detailed description of the weighting methodology and its differences to unweighted estimates is available in Business Impact of Coronavirus (COVID-19) Survey (BICS): preliminary weighted results.

We currently do not produce country or regional breakdowns on a weighted basis. Work is ongoing to enable this and we hope to include these for future waves of BICS outputs. Our aim is to produce subnational weighted estimates should the sample and response allow.

We currently provide unweighted estimates with a country and regional split for selected variables in our detailed dataset. These should be treated with caution when used to evaluate the impact of the coronavirus (COVID-19) pandemic across the UK. When unweighted, each business is assigned the same weight regardless of turnover, size or industry, and businesses that have not responded to the survey or that are not sampled are not taken into account.

For unweighted country and region breakdowns, see the accompanying dataset.

Weighted estimates for Scotland for businesses with greater than nine employees are available from the Scottish Government.

Coverage

The MBS covers the UK for production and only Great Britain for services. The RSI and Construction are Great Britain-focused. Therefore, 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

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. Other than for a minority of larger business or businesses that have a more complex structure, the reporting unit is the same as the enterprise.

Where more than one type of economic activity is carried out by a local unit or enterprise, its principal activity is the activity in which most of the people are employed, and it does not necessarily account for 50% or more of the total employment of the unit. There are detailed rules for determining Standard Industrial Classification (SIC) for multiple-activity economic units.

Regional estimates

Regional BICS estimates are produced by taking the survey return from each reporting unit and then applying this to the reporting unit's local sites. If a business has a site or several sites (also known as local units) within a country, using information from the IDBR, then this business is defined to have presence there.

The business is then allocated once within each region (regardless of the number of sites) and the information provided by the reporting unit as a whole is copied and used within each country.

Aggregates of Nomenclature of Territorial Units for Statistics (NUTS1) regions such as the UK or England may have higher or lower response proportions than any of their constituent regions because of differences in the sample composition in terms of company workforce.

Because the larger, aggregate regions such as the UK or England generally have a larger proportion of smaller companies, if there is a substantial difference between the response proportions of larger and smaller companies, this will be reflected in the top-line figures.

Sample

For unweighted data only, the businesses that have responded to Wave 18 of BICS are represented, and as such these are not fully representative of the UK as a whole.

The sampling frame used in BICS was designed to achieve adequate coverage of the listed industries from the MBS. Coverage and response rate of the medium to largest businesses in terms of total employment are satisfactory to produce estimates on this basis.

To help interpret the data, we have presented results based on the number of employees in each business, grouping fewer than 250 employees and those with 250 employees or more.

All businesses with an employment of greater than 250 employees and that are included within the three monthly surveys (MBS, RSI and Construction) are included in the BICS sample with a random sample of 1% for those with an employment between 0 and 249.

As the sample is selected fortnightly, the same businesses will be selected for at least two waves depending on how many coronavirus survey selections there are between the selection of these feeder surveys. Because of the randomly selected element, there will be differences in this part of the sample once the feeder surveys have been redrawn. As this is a voluntary survey, businesses may or may not choose to respond to the different waves. Response coverage can be mixed between the different waves.

While we have the ability to align the reporting unit to lower-level detail, and also increased detail on the SIC, it is not advisable given the sparseness of response in certain industries and size bands.

Business Impact of Coronavirus (COVID-19) Survey

The Business Impact of Coronavirus (COVID-19) Survey (BICS) is voluntary. Unweighted estimates should be treated with caution, as results reflect the characteristics of those that responded and not necessarily the wider business population.

The survey was designed to give an indication of the impact of the coronavirus (COVID-19) pandemic and the end of the EU transition period on businesses and a timelier estimate than other surveys.

Comparison of waves

A detailed description of the weighting methodology and its differences to unweighted estimates across waves can be found in BICS: preliminary weighted results.

The production of weighted BICS estimates will allow for comparisons between waves, as any imbalances caused by non-responding and non-sampled businesses are corrected. This means that weighted estimates in every wave represent the experiences of all businesses rather than just those that have responded.

Some BICS variables remain unweighted while development continues to weight all the BICS variables. Therefore, comparison of unweighted estimates between waves should still be treated with caution because of the voluntary nature of the survey, the difference in response rates and dependency on those businesses that only responded in particular waves.

For a time series analysis on how the unweighted estimates changed between Wave 2 (23 March to 5 April 2020) and Wave 7 (1 to 14 June 2020), please see Insights of BICS: 23 March to 5 April (Wave 2) to 1 to 14 June (Wave 7) 2020.