Business insights and impact on the UK economy: 9 September 2021

• Of businesses not permanently stopped trading, 13% reported that vacancies were more difficult to fill in the last month compared with normal expectations for this time of year in late August 2021, up from 9% in early August 2021; 30% of businesses in the accommodation and food service activities industry reported vacancies being more difficult to fill than normal.

• Half of currently trading businesses in the construction industry reported the prices of materials, goods or services bought in the last two weeks had increased more than normal price fluctuations, compared with approximately one-quarter of businesses across all industries.

• The percentage of businesses currently trading in late August 2021 was 90%, a figure that has remained stable since late June 2021; the transportation and storage industry has remained the industry with the lowest percentage of businesses currently trading, at 78%.

• The proportion of businesses' workforce reported to be on full or partial furlough leave remains broadly unchanged from late July to mid-August 2021, at 6%; however, approximately 1 in 6 (16%) of the workforce in the other service activities industry are estimated to be on full or partial furlough leave.

• In mid-August 2021, businesses reported that 1% of their workforce were on sick leave or not working because of coronavirus (COVID-19), self-isolation or quarantine; this figure has remained stable since comparable estimates began in June 2020.

• Of not permanently stopped trading businesses, 15% reported there has been an increase in innovation since the start of the coronavirus (COVID-19) pandemic, but in the transportation and storage industry the figure was only 1%.

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 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.

The data presented here are final results from Wave 38 of BICS, which was live for the period 23 August to 5 September 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 9 August to 22 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.

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 38 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” 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.
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 August 2021. This figure has remained broadly 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 compared with normal expectations for this time of year was 28%, down from 30% two weeks earlier

• the percentage of businesses reporting an increase in turnover compared with normal expectations for this time of year was 7%

• the percentage of businesses reporting no effect to turnover compared with normal expectations for this time of year was 51%

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 broadly unchanged from late July to mid-August 2021, at 6% (representing a provisional approximate range of between 5% to 7% of businesses' workforce). This is the lowest proportion of businesses' workforce reported to be on furlough leave since the furlough scheme began. The furlough scheme is set to end on 30 September 2021.

The estimated 6% of businesses' workforce reported to be on full or partial furlough leave in mid-August 2021 suggests that approximately 1.4 to 1.8 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 BICS estimates of not permanently stopped trading, and currently trading businesses in comparison to the HMRC's CJRS official statistics, up to 31 July 2021.

For current point estimates from BICS and looking forward as coronavirus regulations remain relaxed, it is recommended to use the "businesses not permanently stopped trading" estimates. This is because the number of responding businesses in industries previously highly affected by heightened coronavirus restrictions has increased with the 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, as the estimate does not contain paused trading businesses, which typically have a higher proportion of their workforce on furlough.

We make these recommendations, as getting responses 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.

An updated overview of the differences between the fortnightly BICS furlough estimates and HMRC's CJRS figures, was published on 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 mid-August 2021, 43% were reported to be fully furloughed; this has decreased from 69% in mid-January 2021, although it is up 4 percentage points from the lowest proportion of fully furloughed employees reported in early August 2021.

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 late August 2021, at 78%. The high percentage of paused and 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.

However, within the freight transport by road sub-industry, the proportion of businesses that have paused trading or are permanently ceased trading has declined from 36% in late June 2021 to 29% in late August 2021. In contrast, the proportion of businesses in the licensed carriers industry (businesses involved in pickup, sorting, transport and delivery of letter-post and parcels and packages, operating outside the scope of a universal service obligation) that have paused trading or have permanently ceased trading has remained over 90% since late June 2021.

The administrative and support service activities industry and the information and communication industry had the joint second lowest proportion of businesses currently trading, at 85% in late August 2021. This has remained broadly unchanged since early August 2021.

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 capacity but is still trading.

Financial performance

In the education (private sector and higher education businesses only) industry, 58% of businesses reported experiencing a decrease in turnover in the last two weeks compared with normal levels for this time of year, in mid-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.

Seven 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 mid-August 2021. The real estate industry reported the largest percentage, at 80%, which has increased from 64% in late July 2021. This was followed by the information and communication industry, the other service activities industry and the professional, scientific and technical activities industry at 66%, 61% and 60%, respectively. The information and communication industry has increased by 5 percentage points, the other service activities industry by 39 percentage points, and the professional, scientific and technical activities industry has remained stable since early August 2021.

Workforce

Approximately 1 in 6 (16%) 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. This is the lowest proportion reported since late September 2020 and has declined from a high of 79% in late January 2021. All other industries reported fewer than 10% of the workforce on furlough leave in mid-August 2021.

In mid-August 2021, businesses reported 1% of their workforce were on sick leave or not working because of coronavirus (COVID-19), self-isolation or quarantine. The proportion has remained stable since comparable estimates began in June 2020. Self-isolation and quarantine rules have changed during the reference period, and this should be kept in mind in relation to these figures.

The sale of new cars and light motor vehicles industry (7%), the unlicensed restaurants and café industry (3%) and the retail sale in non-specialised stores with food, beverages or tobacco predominating industry (1%) reported the highest proportions and contributions of workforce on sick leave or not working because of coronavirus (COVID-19), self-isolation or quarantine.

Of currently trading businesses, 10% 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 38 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 because of 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 has remained broadly stable (between 57% to 64%) since late January 2021, however, there has been a decline in the proportion of businesses that have not been able to import or importing less than normal, from 30% in late July 2021 to 24% in mid-August 2021. Similarly, the proportion of currently trading businesses that experienced a challenge in exporting has remained broadly stable (between 49% to 56%) since late January 2021. 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.

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. 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.

One-quarter (25%) of businesses currently trading reported that the prices of materials, goods or services bought in the last two weeks had increased more than normal price fluctuations, in mid-August 2021. This has increased from 21% in late May 2021, and from 14% of businesses at the end of 2020 (14 to 27 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 water supply, sewerage, waste management and remediation activities (65%), construction (50%), and manufacturing (42%). The construction and manufacturing industries show steady increases in prices of materials, goods and services bought since November 2021.

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

Of businesses not permanently stopped trading, 13% reported that vacancies were more difficult to fill in the last month compared with normal expectations for this time of year, in late August 2021. This is up from 9% in early August 2021.

Several industries had a higher proportion of businesses reporting more difficulty filling vacancies than normal for this time of year. These were:

• the accommodation and food service activities industry at 30%, unchanged from early August 2021

• the water supply, sewerage, waste management and remediation activities industry at 27%, up from 19% in early August 2021

• the human health and social work activities industry at 23%, up from 21% in early August 2021

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

Of those businesses that are finding vacancies more difficult to fill, approximately two-thirds (67%) reported a lack of suitable applicants as a reason. 

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

• lack of suitable applicants for the roles on offer (67%) with the professional, scientific and technical activities industry reporting the highest proportion (88%)

• reduced number of EU applicants (25%) with the transport and storage industry reporting the highest proportion (46%)

• increased number of vacancies for other reasons (18%) with the transport and storage industry reporting the highest proportion (47%)

• business cannot offer an attractive pay package to applicants (15%) with the professional, scientific and technical activities industry reporting the highest proportion (25%)

• reduced number of applicants aged 16 to 24 years (12%) with the water supply, sewerage, waste management and remediation activities industry reporting the highest proportion (34%)

• increased number of vacancies because of furloughed workers leaving (4%) with the accommodation and food service activities industry reporting the highest proportion (14%)

Businesses not permanently stopped trading were asked if their innovation had changed since the start of the coronavirus (COVID-19) pandemic, excluding mandatory changes to comply with coronavirus (COVID-19) regulations.

Of all businesses not permanently stopped trading, 15% reported there has been more innovation since the start of the pandemic, while 23% reported innovation has not changed and 14% were not sure.

The education (private sector and higher education businesses only) industry had the highest percentages of businesses reporting more innovation at 58% in late August 2021, while less than 1% of businesses in the transportation and storage industry reported increased innovation.

Businesses were also asked, since the start of the coronavirus (COVID-19) pandemic, which of the following did your business innovate? Across all businesses where innovation is applicable the most innovation was seen in:

• adoption of digital technologies (28%)

• improvement of existing products and services (22%)

• introduction of new products and services (19%)

• changes in management practices (19%)

• improvements in methods of logistics, delivery or distribution (11%)

• 46% reported they were not sure

Data on full industry breakdown, including how businesses expect innovation to affect productivity is available in the accompanying dataset.

Access to microdata

The BICS microdata for Waves 1 to 37 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 38 survey was live for the period 23 August to 5 September 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 9 August to 22 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.