Coronavirus and the economic impacts on the UK: 24 September 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: 24 September 2020

• Coronavirus and the social impacts on Great Britain: 18 September 2020

• Weighted Business Impact of Coronavirus (COVID-19) Survey (BICS) estimates are available for the first time for the following selected variables: the current trading status of the business, the impact of turnover for the business’ financial performance, and the proportions of workforce status.

• 84% of businesses were currently trading, compared with 66% of businesses in Wave 7 (1 June to 14 June 2020).

• There were four industries where more than half of their businesses experienced a decrease in turnover compared with what is normally expected for this time of year.

• 12% of the workforce were on partial or full furlough leave.

• New analysis shows fortnightly estimates from BICS on businesses’ turnover broadly reflects the published UK monthly gross domestic product (GDP) estimates.

• 63% of businesses not permanently stopped trading in the accommodation and food service activities industry used the Eat Out to Help Out scheme.

Weighted estimates (including imputation) for the Business Impact of Coronavirus (COVID-19) Survey (BICS) have been developed for three of the main variables collected. These are the current trading status of the business, the impact of turnover for the business’ financial performance, and the proportions of workforce status. A detailed description of the weighting methodology and its differences to unweighted estimates is available in Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results.

These weighted estimates (including imputations) differ from previously published unweighted estimates as more emphasis is given to small businesses (such as those with fewer than 50 employees). However, for large businesses, the estimates are much the same as those provided in previous publications.

Unweighted BICS estimates mean that we can only make inferences about the experiences of UK businesses in our sample that have responded. The use of weighting (including imputation) accounts for both unsampled and non-responding businesses, enabling us to make inferences about all UK businesses, not just those in the sample and that have responded.

Currently, weighted estimates (including imputations) are only available for these three variables. However, estimates for other variables are currently being developed. The use of weighted estimates will allow comparison across different waves.

Final results from Wave 13 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) are for the period 24 August to 6 September 2020, which closed on 20 September 2020.

For presentational purposes:

• has been trading for more than the last two weeks, and started trading within the last two weeks after a pause in trading have been combined to currently trading

• paused trading but intends to restart in the next two weeks, and paused trading and does not intend to restart in the next two weeks have been combined to temporarily closed or paused trading

The breakdowns of these categories are available in the detailed dataset in Section 12.

Data for Figure 1, Figure 2 and Table 1 have been weighted by count of UK businesses and provides a representation of the business population. This differs to previous BICS publications where the estimates were unweighted. More information regarding this weighting method can be found in Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results.

Across all industries:

• 80% of businesses had been trading for more than the last two weeks

• 4% of businesses had started trading within the last two weeks after a pause in trading

• 3% of businesses had paused trading but intend to restart in the next two weeks

• 10% of businesses had paused trading and do not intend to restart in the next two weeks

• 3% of businesses had permanently ceased trading

The information and communication industry and the arts, entertainment and recreation industry had the highest percentages of businesses that were temporarily closed or paused trading, at 26% and 23% respectively.

These figures are not comparable with previously published BICS estimates, as previously published estimates were unweighted. However, a time series of weighted estimates (as published in Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results) is provided in Figure 2.

Figure 2 shows how the trading status weighted by count estimates follows the same general movements as the unweighted estimates but are at a lower level because of the impact of smaller businesses on the weighted estimates.

Figure 2 shows that between Wave 12 (10 August to 23 August 2020) and Wave 13 (24 August to 6 September), there was an increase of 1% in businesses currently trading.

A breakdown of trading status by employment size of businesses is shown in Table 1. This shows that micro businesses (those with employment fewer than 10) have a different make-up than those businesses with greater than 10 employment. This shows the impact weighting by count has when comparing with unweighted estimates, and that the reason for this impact is solely driven by these micro businesses.

Data for Figure 3 and Table 2 have been weighted by employment. This gives businesses with larger employment a greater emphasis in results but still takes account of all businesses in the population. Weighting by employment is at a level similar to the previously published unweighted Business Impact of Coronavirus (COVID-19) Survey (BICS) estimates, although we believe this measure is heavily influenced by the larger size employment businesses, which is why our preferred measure are those estimates weighted by count of the trading status variable. More information regarding the weighting by employment method and a time series of preliminarily weighted estimates can be found in Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results.

For presentational purposes:

• has been trading for more than the last two weeks, and started trading within the last two weeks after a pause in trading have been combined to currently trading

• paused trading but intends to restart in the next two weeks, and paused trading and does not intend to restart in the next two weeks have been combined to temporarily closed or paused trading

The breakdowns of these categories are available in the detailed dataset in Section 12.

Across all industries:

• 96% of businesses had been trading for more than the last two weeks

• 1% of businesses had started trading within the last two weeks after a pause in trading

• less than 1% of businesses had paused trading but intend to restart in the next two weeks

• 2% of businesses had paused trading and do not intend to restart in the next two weeks

• less than 1% of businesses had permanently ceased trading

The arts, entertainment and recreation industry was the only industry where less than 90% of its businesses were currently trading, at 83%.

The arts, entertainment and recreation industry also had the highest percentage of businesses that were temporarily closed or paused trading, at 17%.

The differences between Figures 1 and 3 and Tables 1 and 2 are because of the different weighting methodologies used. Figure 1 and Table 1 use weighting by count methodology, which allows for a more representative assessment of the impact of the coronavirus (COVID-19) pandemic on UK businesses, giving a clear view of the total number of businesses trading; Figure 3 and Table 2 use weighted by employment methodology, which factors in the size of the business based on employment. Trading proportions using this method are higher because smaller businesses are less likely to be trading.

A detailed description of the weighting methodology and its differences to unweighted estimates is available in Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results.

Additional data and breakdowns on the current trading status of businesses can be found in the detailed dataset in Section 12. This includes unweighted data broken down by region.

Data for Figure 4 and Table 3 have been weighted by turnover, where, in effect, businesses with larger turnover are given greater emphasis in results but all businesses in the population are accounted for. More information regarding this weighting method can be found in Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results.

For presentational purposes, increased turnover categories and decreased turnover categories have been combined. The breakdowns of these categories are available in the detailed dataset in Section 12.

Across all industries, of businesses currently trading:

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

• 34% experienced no impact on their turnover

• 12% experienced an increase in turnover compared with what is normally expected for this time of year

There were four industries where more than half of their businesses experienced a decrease in turnover compared with what is normally expected for this time of year. These were the arts, entertainment and recreation industry (68%), the education industry (private sector and higher education businesses only) (62%), the accommodation and food service activities industry (59%), and the administrative and support service activities industry (51%).

Additional data and breakdowns on the impact of turnover for businesses’ financial performance can be found in the detailed dataset in Section 12. This includes unweighted data broken down by region.

Data for Figure 5 and Table 4 have been weighted by employment, where, in effect, businesses with larger employment sizes are given greater emphasis in results but all businesses in the population are accounted for. More information regarding this weighting method can be found Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results.

Across all industries, of businesses not permanently stopped trading:

• 12% of the workforce were on partial or full furlough leave

• 27% of the workforce were working remotely instead of at their normal place of work

• 57% 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 41% and 29% respectively

Meanwhile, 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 71% and 62% respectively.

Additional data and breakdowns on the proportions of businesses’ workforce can be found in the detailed dataset in Section 12.

For a more detailed outline of ‘Other’ working arrangements across waves, please see the Coronavirus and the experiences of UK businesses, textual analysis: March 2020 to July 2020 article, which outlines how these ‘Other’ working arrangements have changed over Waves 2 to 9.

Data for Figure 6 is unweighted. However, weighted data for these variables to allow further inferences about all UK businesses are currently being developed.

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:

• 6% of the workforce had returned from furlough in the last two weeks

• 6% of the workforce had returned from remote working to the normal workplace in the last two weeks

The introduction of preliminary weighted estimates (not including imputations) for the Business Impact of Coronavirus (COVID-19) Survey (BICS) for Waves 7 to 13 now allows the comparison of results across waves. This, in turn, allows the comparison of trends in the BICS data with other economic indicators published by the Office for National Statistics (ONS).

Figure 7 shows how the fortnightly estimates from BICS on businesses’ turnover broadly reflects 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.

The BICS calculation is based on a net balance approach, using the final unweighted BICS results for Waves 1 to 6 and preliminary weighted BICS estimates (not including imputations) for Wave 7 onwards, using the turnover variable.

At the beginning of the pandemic (February/March 2020), both the monthly GDP estimates and the BICS net balances show a sharp decrease in turnover, with the lowest peak at the end of April and beginning of May. From this point onwards, GDP has shown a steady increase until July, which is where this data ends. From Wave 7 of BICS onwards (June 2020), the weighted BICS data shows a similar trend to GDP estimates. The trajectory presented by BICS estimates after July continues to show an increase in businesses turnover. However, the latest estimate in Wave 13 of BICS (end of August and beginning of September) suggests a small dip in businesses turnover.

Figure 7: Fortnightly estimates from BICS on businesses’ turnover broadly reflects the published UK monthly GDP estimates

Net balances of businesses currently trading against GDP monthly estimates, UK, 9 March to 6 September 2020

Source: Office for National Statistics – Business Impact of Coronavirus (COVID-19) Survey

Notes:

1. Final results for Waves 1 to 6 and preliminary weighted results (not including imputations) for Waves 7 to 13 of the Office for National Statistics (ONS) Business Impact of Coronavirus (COVID-19) Survey (BICS).
2. The preliminary weighted BICS estimates in this figure do not include imputation. Based on our methodology, imputations are expected to have a small impact on weighted results.
3. 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.
4. Monthly GDP publications can be found here.
5. Net balances have been calculated by subtracting the weighted count of businesses who have reported a decrease in turnover from the weighted count of businesses with an increase in turnover, all divided by the total weighted number of businesses currently trading for that wave.

Download this image Figure 7: Fortnightly estimates from BICS on businesses’ turnover broadly reflects the published UK monthly GDP estimates

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The following section presents percentages relative to businesses who have not permanently stopped trading.

Data for Figure 8 are unweighted. However, weighted data for these variables to allow further inferences about all UK businesses are currently being developed.

In Wave 13, businesses were given the option to select the Help Out to Eat Out scheme when asked which initiatives their business was using.

Figure 8: Across all industries, 9% of businesses not permanently stopped trading reported using the Eat Out to Help Out scheme, with 63% using it within the accommodation and food service activities industry

Government schemes estimates from the Business Impact of Coronavirus (COVID-19) Survey, unweighted, 24 August to 6 September 2020

Notes:

1. Final results (unweighted), Wave 13 of the Office for National Statistics (ONS) Business Impact of Coronavirus (COVID-19) Survey; businesses who have not permanently stopped trading.

2. Bars may not sum to 100% because of rounding, percentages less than 1% being removed for disclosure purposes, and businesses could select multiple schemes.

3. All percentages are a proportion of businesses that have not permanently stopped trading apart from government schemes received, which is a proportion of those that have not permanently stopped trading and applied for the Coronavirus Job Retention Scheme (CJRS) and/or government-backed accredited loans or finance agreements.

4. Businesses were asked for their experiences for the reference period 24 August to 6 September 2020. However, for questions regarding government schemes, businesses may respond from the point of completion of the questionnaire (7 September to 20 September 2020).

Across all industries, 9% of businesses not permanently stopped trading reported using the Eat Out to Help Out scheme. However, this scheme was primarily aimed at the accommodation and food service activities industry, which is reflected in the 63% of businesses in this industry that reported using the scheme. An additional 20% of businesses in the arts, entertainment and recreation industry also reported using the Eat Out to Help Out scheme. The scheme ended on 31 August 2020.

In addition to being the two industries with the highest percentages of businesses using the Eat Out to Help Out scheme, the accommodation and food service activities industry and the arts, entertainment and recreation industry also had the highest percentages of businesses applying for the Coronavirus Job Retention Scheme (CJRS), at 96% and 88% respectively.

Meanwhile, the human health and social work activities industry (private sector businesses only) and the information and communication industry reported the highest percentages of businesses that had not applied for any of these schemes, at 56% and 43% respectively.

Further breakdowns by industry and by region of government schemes and initiatives can be found in the detailed dataset in Section 12.

HMRC also publishes cumulative estimates on Coronavirus (COVID-19) statistics, looking at data on the CJRS, the Self-Employment Income Support Scheme (SEISS) and the VAT payments deferral scheme.

Data for Figures 9 and 10 are unweighted. However, weighted data for these variables to allow further inferences about all UK businesses are currently being developed.

For presentational purposes, cash reserve categories between zero and three months have been combined. The breakdowns of these categories are available in the detailed dataset in Section 12.

Across all industries, of businesses not permanently stopped trading:

• 4% had no cash reserves
• 22% had less than three months’ cash reserves
• 17% had between four to six months’ cash reserves
• 35% had more than six months’ cash reserves

The accommodation and food service activities industry had the highest percentage of businesses indicating they had no cash reserves, at 6%.

Conversely, the information and communication industry and the education industry (private sector and higher education businesses only) reported the highest percentages of businesses indicating they had cash reserves to last more than six months, at 48% and 47% respectively.

Businesses who had not permanently stopped trading were also asked about their risk of insolvency.

Across all industries, of businesses not permanently stopped trading:

• 2% had a severe risk of insolvency
• 9% had a moderate risk of insolvency
• 48% had a low risk of insolvency
• 30% had no risk of insolvency

The accommodation and food service activities industry had the highest percentage of businesses indicating they had a severe risk of insolvency, at 5%. This was followed by the administrative and support service activities industry and the arts, entertainment and recreation industry, both at 3%.

Conversely, the water supply, sewerage, waste management, and remediation activities industry reported the highest percentage of businesses indicating they had no risk of insolvency, at 43%.

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 Business Impact of Coronavirus (COVID-19) Survey (BICS), which captures businesses’ views on the impact on turnover, workforce prices, trade and business resilience. Wave 13 data relate to the period 24 August to 6 September 2020. The survey questions are available in Business Impact of Coronavirus (COVID-19) Survey questions: 24 August to 6 September 2020.

The different experiences of businesses during the coronavirus (COVID-19) pandemic

In the final results of Wave 13, of 23,900 businesses surveyed, 5,998 businesses (25.1%) responded.

The Wave 13 survey was live for the period 7 September to 20 September 2020 and businesses were asked about their experience for the two-week survey reference period, 24 August to 6 September 2020. Dependent on responses to certain questions, businesses are asked different questions.

For questions or response options referring to the “last two weeks” or expectations of the “next two weeks”, businesses could respond from the point of completion of the questionnaire based on their current experiences. This means that business responses may cover any two-week time period across the following reference periods respectively: 24 August to 6 September 2020 and 7 September to 20 September 2020. More detail on the type of questions asked are available in the detailed dataset in Section 12.

Weighting

Weighted estimates (including imputation) for the Business Impact of Coronavirus (COVID-19) Survey (BICS) have been developed for three of the main variables collected. These are current trading status of the business, impact of turnover for the business’ financial performance, and proportions of workforce status. A detailed description of the weighting methodology and its differences to unweighted estimates is available in Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results.

Currently, weighted estimates (including imputations) are only available for these three variables. However, estimates for other variables are currently being developed.

As such, unweighted estimates should still be treated with caution when used to evaluate the impact of the coronavirus across the UK economy. 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 who are not sampled are not taken into account.

Our current aim is to produce the Wave 14 publication (8 October 2020) on a fully weighted basis, so all variables and tables will be presented as representative of the entire business population (for the industries covered). Once available, we will first release a back series (Wave 7 to 12) for the three currently weighted variables (trading status, financial performance and workforce working arrangements). A back series for all variables will then follow with an indication of the likely timeframe for this included in the next publication.

Coverage

The approach for the sample design has been to use three standard Office for National Statistics (ONS) surveys – the Monthly Business Survey (MBS), Retail Sales Inquiry (RSI) and Construction, as a sampling frame. Each of these survey samples are drawn from the Inter-Departmental Business Register (IDBR), which covers businesses in all parts of the economy, except those that are not registered for Value Added Tax (VAT) or Pay As You Earn (PAYE); this includes very small businesses, the self-employed, those without employees, and those with low turnover. Some non-profit making organisations are also not registered on the IDBR.

MBS covers the UK for production, and only Great Britain for services. 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 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 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.

Since 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

Other than for the three weighted variables (trading status, financial performance and workforce status), only the businesses that have responded to Wave 13 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) are represented in unweighted data, and as such these are not fully representative of the UK as a whole.

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

To help interpretation of 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 included within the three monthly surveys (MBS, RSI, Construction) are included in the BICS sample with a random sample of 1% for those with an employment between 0 and 249.

The sample comprises 23,904 businesses with a split of 7,265 in employment for 250 and over and 16,635 for employment between 0 and 249. This breaks down further to 13,919 for employment between 0 and 99, and 2,716 for employment between 100 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 and responses are generally qualitative. Unweighted estimates should be treated with caution, as results reflect the characteristics of those who responded and not necessarily the wider business population.

The survey was designed to give an indication of the impact of the coronavirus (COVID-19) 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 the recently published Business Impact of Coronavirus (COVID-19) Survey: preliminary weighted results article.

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.

A initial article on Business impact of coronavirus, analysis over time, UK: Waves 2 to 5 captures common businesses responses on how their turnover, workforce, prices, trade and business resilience have been affected in the two-week reference period. These data relate to the period 23 March 2020 to 17 May 2020 (Wave 2 to Wave 5).

An updated article on Insights of the Business Impact of Coronavirus (COVID-19) Survey: 23 March to 5 April (Wave 2) to 1 to 14 June (Wave 7) 2020 analyses business responses on how their turnover, cash flow and workforce have been affected in each two-week reference period.

Publication of coronavirus-related data

This bulletin is published on a fortnightly basis. This is to ensure we are meeting user needs for more timely data.

High-level provisional estimates will be included as part of the Office for National Statistics (ONS) latest indicators release in the alternate weeks.