Business insights and impact on the UK economy: 7 October 2021

• Of businesses not permanently stopped trading, 12% reported having vacancies that were more difficult to fill in the last month whilst 67% reported they had no vacancies to fill; however, these figures were 41% and 25% for businesses with 10 employees or more, respectively.

• Of businesses in the accommodation and food service activities industry, 11% reported that staff turnover had increased in the last month compared with normal expectations for this time of year; this compares with 4% across all businesses.

• The proportion of businesses’ workforce reported to be on full or partial furlough leave fell to 5% in early September 2021 (representing a provisional approximate range of between 1.1 to 1.6 million people).

• Over half of currently trading businesses in the construction industry reported that the prices of materials, goods or services bought in the last two weeks had increased more than normal price fluctuations, compared with nearly three in ten of businesses across all industries (29%).

• In the last two weeks, 10% of businesses currently trading reported the price of goods or services sold increased more than normal price fluctuations, with the manufacturing industry, the wholesale and retail trade; repair of motor vehicles and motorcycles industry, and the other service activities industry reporting the highest proportions at 25%, 23% and 21% respectively.

• Of currently trading businesses that reported how their importing had been affected, 22% reported lack of hauliers to transport goods or lack of logistics equipment as a challenge in early September 2021, compared with 11% in 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

The data presented here are final results from Wave 40 of the Business Insights and Conditions Survey (BICS), which was live for the period 20 September to 3 October 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 6 September to 19 September 2021.

These dates should be kept in mind in relation to the easing of coronavirus (COVID-19) restrictions. In England all closed sectors of the economy opened in June 2021, but some regional variations across the UK still apply. Dependent on the location and date when the business responded, the easing of restrictions could have had an impact on the estimates.

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 40 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: data for this Wave are not available as the question has been rotated out of the questionnaire.
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 this should not have had an effect on the percentages displayed here.
7. 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 was 90% in late September 2021. This figure has remained broadly stable since late June 2021, following an increase from 71% seen in January 2021.

Businesses currently trading were asked how their turnover compared with normal expectations for this time of year. Results were similar to two weeks previously:

• 27% of businesses reported a decrease in turnover compared with normal expectations for this time of year
• 7% of businesses reported an increase in turnover compared with normal expectations for this time of year
• 51% of businesses reported no effect to turnover compared with normal expectations for this time of year

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)) fell to 5% in early September 2021 (representing a provisional approximate range of between 4% to 6% of businesses’ workforce) after remaining unchanged throughout August 2021 at 6%.

The estimated 5% of businesses’ workforce reported to be on full or partial furlough leave in early September 2021 suggests that approximately 1.1 to 1.6 million people were furloughed within the industries surveyed in BICS. Of the workforce reported to be on furlough, a higher proportion were partially furloughed than fully furloughed, with 2% of the workforce (approximately 0.3 to 0.8 million people) reported to be fully furloughed. The furlough scheme subsequently ended on 30 September 2021, but this publication contains no information relating to the period after the end of the scheme.

The BICS estimate of the number of employees on furlough 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 BICS estimates of not permanently stopped trading, and currently trading businesses in comparison to the HMRC’s CJRS official statistics, up to 31 August 2021.

For current-point furlough estimates from BICS, and looking forward as coronavirus (COVID-19) regulations remain relaxed, it is recommended to use the "businesses not permanently stopped trading" estimates. However, it is recommended to use the BICS "currently trading" series when reviewing as a time series or looking backwards. Please note that the BICS "currently trading" series represents a lower range for the percentage of the workforce on furlough, as the estimate does not contain paused trading businesses, which typically have a higher proportion of their workforce on furlough.

An updated overview of the differences between the fortnightly BICS furlough estimates and HMRC's CJRS figures, including the reasoning for recommendations, was published on 2 September 2021.

In late September 2021, 49% of all businesses not permanently stopped trading reported that they had furloughed some of their workforce since the start of the coronavirus pandemic. This rose to 80% for businesses with 10 employees or more.

Businesses that had furloughed some of their workforce were asked if they had provided additional training or support for their furloughed workforce after their return to work. Of these businesses:

• 23% reported yes, my business has provided this
• 5% reported no, but my business intends to provide this
• 59% reported no, my business has not and does not intend to provide this
• 14% reported not sure or not applicable

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 administrative and support service activities industry had the lowest proportion of businesses currently trading, at 84% in late September 2021, and is broadly unchanged from early September 2021.

The transportation and storage industry had the second lowest percentage of businesses currently trading in late September 2021, at 86%. This is down from a peak of 94% in late September 2020; however, it is a 6 percentage point increase on early September 2021 and the highest proportion since mid-January 2021. The high percentage of paused and permanently ceased traders is partly driven by the freight transport-by-road industry and the unlicensed carrier’s industry. This industry has been widely reported as experiencing a shortage of lorry drivers.

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, 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 early September 2021, 49% of businesses in the other service activities industry reported experiencing a decrease in turnover in the last two weeks compared with normal expectations for this time of year. This high percentage is partly driven by the hairdressing and other beauty treatment sub-industry.

Five industries have reported over 50% of businesses seeing no effect to their turnover in the last two weeks compared with normal levels for this time of year, in early September 2021. This is down from seven industries in late August. The real estate activities industry reported the largest percentage reporting no effect on turnover, at 76% in early September 2021, which has increased from 65% in late August 2021. This was followed by the information and communication industry, and the professional, scientific and technical activities industry, both at 62%.

Workforce

Approximately one in five (18%) of the workforce in the other service activities industry (which includes hairdressing and other beauty treatment businesses) were reported to be on partial or full furlough leave in early September 2021. This has declined from a high of 79% in late January 2021 and has remained broadly unchanged since mid-August. All other industries reported fewer than 10% of the workforce on furlough leave in early September 2021. Note that the industries reported in this publication are composed of combined sub-industries, for which we are unable to report details because of sample size.

In early September 2021, businesses reported less than 1% of their workforce were on sick leave or not working because of coronavirus, self-isolation or quarantine, and the proportion has remained stable since comparable estimates began in June 2020.

Many factors are affecting the UK business workforce, and a future change in landscape is due as the Coronavirus Job Retention Scheme (CJRS) ended on 30 September 2021. In this section we consider aspects around recruiting and retaining workers.

Staff turnover

Businesses not permanently stopped trading were asked how their staff turnover for the last month compared with normal expectations for this time of year. Across all businesses:

• 4% reported staff turnover had increased, 16% for businesses with more than 10 employees
• 3% reported staff turnover had decreased, 5% for businesses with more than 10 employees
• 49% reported staff turnover had not been affected, 63% for businesses with more than 10 employees
• 44% reported not sure or not applicable, 16% for businesses with more than 10 employees

Industries with the highest proportion of businesses reporting an increase in staff turnover were accommodation and food service activities (11%), arts, entertainment, and recreation (6%), and information and communication (5%).

Vacancies

Of all businesses not permanently stopped trading, 12% reported that vacancies were more difficult to fill in the last month compared with normal expectations for this time of year, in late September 2021. However, there was a large difference depending on the size of business, with 9% of businesses with fewer than 10 employees and 41% of businesses with 10 employees or more reporting difficulties filling vacancies.

Across all size bands several industries had a higher proportion of businesses reporting more difficulty filling vacancies than normal for this time of year:

• the other service activities industry, at 29%
• the accommodation and food service activities industry, at 27%
• the human health and social work activities industry, at 24%

Businesses that reported difficulties filling vacancies in the last month compared with normal expectations were asked for the reasons for the difficulty.

Across all businesses (that reported difficulties filling vacancies), the most difficulties experienced were:

• lack of qualified applicants for the roles on offer (53%), with the information and communication industry reporting the highest proportion (84%)
• low number of applicants (46%), with the real estate activities industry reporting the highest proportion (85%)
• reduced number of EU applicants (18%), with the education industry reporting the highest proportion (43%)
• business cannot offer an attractive pay package to applicants (16%), with the information and communication industry reporting the highest proportion (32%)
• reduced number of applicants aged 16 to 24 years (9%), with the accommodation and food service activities industry reporting the highest proportion (22%)
• increased number of vacancies for other reasons (9%), with the information and communication industry reporting the highest proportion (24%)

The proportion of businesses that expect to make any of their workforce redundant in the next 3 months has remained broadly similar at 2% despite the end of the furlough scheme at the end of September.

EU and Non-EU workforce

The Business Insights and Conditions Survey (BICS) also asks businesses that have not permanently stopped trading how the number of workers from within and outside the EU at their business has changed, compared with normal expectations for this time of year.

Across all industries, a greater percentage of businesses reported a net decrease in the number of workers from within the EU (4%) compared with a net decrease in the number of workers from outside the EU (less than 1%).

In addition, businesses that have not permanently stopped trading were asked, “if they had employees working abroad, where are the employees based?” Across all industries:

• 3% of businesses have employees within the EU
• 1% of businesses have employees outside the EU
• 1% of businesses have employees both within and outside the EU
• 4% of businesses are not sure, and 92% do not have employees working abroad

Nearly a third (29%) of businesses currently trading reported that the prices of materials, goods or services bought in the last two weeks had increased more than their normal price fluctuations, in early September 2021. This has increased from 21% in late May 2021, and from 14% in late December 2020.

Industries with the highest proportion of businesses reporting an increase in prices of materials, goods and services bought in the last two weeks were construction (52%), other service activities (49%), and manufacturing (49%). The construction and manufacturing industries have shown steady increases in prices of materials, goods and services bought since May 2021.

The construction industry has shown a steady increase in prices of materials, goods and services bought since May 2021. Domestic building businesses were among those businesses affected by the shortage of goods, services or materials.

By contrast, 10% of businesses currently trading reported that they had increased the price of goods or services that they sold in early September 2021. This is up from 8% in mid-August 2021, and 4% in late December 2020.

Industries with the highest proportion of businesses reporting an increase in prices of materials, goods and services that they sold in the last two weeks were manufacturing and wholesale and retail trade at 25% and 23%, respectively.

Of currently trading businesses, 9% had exported and 9% 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 8: Exporting and importing figures from the Business Insights and Conditions Survey

Notes:

1. Final weighted results, Wave 12 to Wave 40 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 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. Exporting or importing challenges: Percentage of businesses currently trading, reported they had exported/imported in the last year, and reported how their exports/imports were affected. Businesses may report that exporting/importing has not been affected but are still able to report challenges.
5. 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.
6. 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.
7. 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 that experienced a challenge in importing or exporting has remained broadly stable since a large increase in January 2021. There has been an ongoing fall in the proportion of businesses saying they have not been able to import or have imported less than normal, although 60% of importing businesses continue to state that they have faced challenges importing. The data suggests businesses are more likely to be experiencing an importing challenge than an exporting one.

Additional paperwork and transportation costs remain the top challenges for exporting and importing, respectively, and the proportion of currently trading businesses experiencing these challenges has remained broadly stable since early May 2021. Of currently trading businesses that reported how their importing had been affected, 22% reported lack of hauliers to transport goods or lack of logistics equipment importing as a challenge, in early September 2021, up from 11% in late April 2021. The wholesale and retail trade; repair of motor vehicles and motorcycles industry reported the largest percentage of lack of hauliers to transport goods or lack of logistics equipment as a challenge at 26%.

Questions from the BICS survey relating to supply chains are not asked every Wave and are covered in detail in our Wave 39 bulletin, published 23 September.

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

Access to microdata

The BICS microdata for Waves 1 to 39 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 40 survey was live for the period 20 September to 3 October 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 6 September to 19 September 2021. The survey questions are available.

Please note, as part of our regular and ongoing quality assessment of our methods we recently 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 (first published 26 August 2021). In the main, previous findings remained unaffected, there were, however, revisions to estimates for certain variables, including turnover, business resilience and proportion on full or partial furlough.

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.