Business insights and impacts on the UK: 19 November 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 percentage of businesses currently trading has fallen to the levels seen in Wave 11 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) (27 July to 9 August 2020), at 82%.

• Half of businesses experienced a decrease in turnover, a sharp increase in Wave 17 compared with Wave 16.

• The accommodation and food service activities industry had the highest percentage of businesses with no or low confidence that their businesses would survive the next three months, at 34%.

• The arts, entertainment and recreation industry had the highest proportion of its workforce on partial or full furlough leave, at 34%, compared with 9% across all industries.

• Of businesses currently trading, 10% identified their business as operating in the hospitality sector, and of these, 37% had changed their operating hours as the result of full closure, and 32% because of the 10pm curfew.

• Across all industries, 7% of businesses expect to temporarily or permanently close a business site in the next two weeks, with 25% of businesses in the accommodation and food service activities industry expecting to close a business site.

Final results from Wave 17 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) are for the period 19 October to 1 November 2020, which closed on 15 November 2020.

These data were collected over the period 2 to 15 November 2020 and refer to the period 19 October to 1 November 2020 (although it is recognised some businesses might respond based on the current circumstances at the time of responding). This should be kept in mind in relation to local and national lockdowns and, dependent on the location and date when the business responded, this could have an impact on the estimates.

Across all industries:

• 79% 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

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

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

• 2% of businesses had permanently ceased trading

The accommodation and food service activities had the lowest percentage of businesses currently trading, at 63%. This was followed by the administrative and support service activities industry, and the arts, entertainment and recreation industry, at 75% and 76% respectively.

The real estate activities industry and the administrative and support service activities industry had the highest percentages of businesses permanently ceased trading, at 6% and 5% respectively.

Figure 2 shows the trend in weighted trading status estimates between Wave 7 (1 to 14 June 2020) and Wave 17 (19 October to 1 November 2020).

The percentage of businesses currently trading had steadily increased from 66% in Wave 7 (1 to 14 June 2020) to 86% in Wave 14 (7 to 20 September 2020), before flattening over Waves 15 and 16. However, in Wave 17 (19 October to 1 November 2020), the percentage of businesses currently trading has fallen to 82%, a level last seen in Wave 11 (27 July to 9 August 2020) of BICS.

Table 1 shows how the trading status of larger businesses compare with micro businesses (businesses with fewer than 10 employees). In Wave 17, 81% of micro businesses were currently trading, compared with 93% of businesses with 250 or more employees.

These data were collected over the period 2 to 15 November 2020 and refer to the period 19 October to 1 November 2020 (although it is recognised some businesses might respond based on the current circumstances at the time of responding). This should be kept in mind in relation to local and national lockdowns and, dependent on the location and date when the business responded, this could have an impact on the estimates.

The percentages of businesses currently trading were compared using unweighted responses of businesses for Week 1 (2 to 8 November 2020) and Week 2 (9 to 15 November) to determine differences over the survey collection period.

The percentage of businesses currently trading varied by the timing of the response to the questionnaire, likely as a result of lockdowns starting and ending during the survey collection period. For example, in England the percentage of businesses currently trading fell across the two weeks (from 94% to 90%) as they moved into lockdown, while the percentage of businesses currently trading in Wales increased (from 89% to 92%) as the nationwide firebreak ended.

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:

• 50% experienced a decrease in turnover compared with what is normally expected for this time of year

• 33% experienced no impact on turnover

• 9% experienced an increase in turnover compared with what is normally expected for this time of year

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

• accommodation and food service activities industry, at 79%

• arts, entertainment and recreation industry, at 72%

• education industry (private sector and higher education businesses only), at 58%

• administrative and support service activities industry, at 54%

Conversely, the wholesale and retail trade industry had the highest percentage of businesses experiencing an increase in turnover, at 15%. 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 17 (19 October to 1 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%, similar to levels seen in Wave 12 (10 to 23 August 2020).

Across all industries, of businesses currently trading:

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

• 31% experienced no impact on profits

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

Similarly to the impact on turnover, the same four industries had more than 50% of their businesses experiencing a decrease in profits:

• accommodation and food service activities industry, at 73%

• arts, entertainment and recreation industry, at 63%

• education industry (private sector and higher education businesses only), at 56%

• administrative and support service activities industry, at 54%

Conversely, the transportation and storage industry and the wholesale and retail trade industry had the highest percentages of businesses experiencing an increase in profits, at 15% and 12% respectively.

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: Fortnightly turnover estimates from BICS broadly follow the same trends as the UK monthly GDP estimates

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

Notes:

1. Final unweighted results, Wave 1 to Wave 6, and final weighted results, Wave 7 to Wave 17, of the Office for National Statistics (ONS) Business Impact of Coronavirus (COVID-19) Survey (BICS).

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:

• 29% 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 accommodation and food service activities industry and the construction industry had the highest percentages of businesses with between zero and three months' cash reserves, at 44% and 40% respectively. This was followed by the administrative and support service activities industry, and the arts, entertainment and recreation industry, at 34% and 33% 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 49% and 45% respectively.

Across all industries, of businesses not permanently stopped trading:

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

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

• 39% had high confidence that their business would survive the next three months

The accommodation and food service activities industry had the highest percentage of businesses that had no or low confidence that their business would survive the next three months, at 34%. This was followed by the administrative and support service activities industry, at 18%.

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 88%. This was followed by the real estate activities industry and the information and communication industry, at 51% and 50% respectively.

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.

Across all industries, of businesses not permanently stopped trading:

• 9% of the workforce were on partial or full furlough leave

• 28% of the workforce were working remotely instead of at their normal place of work

• 60% 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 34% and 22% 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 77% and 65% respectively.

Figure 10 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 17 (19 October to 1 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 has gradually dropped to 8% in Wave 16 (5 to 18 October 2020), before increasing to 9% in Wave 17 (19 October to 1 November 2020).

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.

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

• 7% of the workforce returned from furlough leave to homeworking in the last two weeks

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

In Wave 17, businesses were asked if their business was in the hospitality sector, and how local and national lockdown regulations affected their trade and footfall to the business.

These data were collected over the period 2 to 15 November 2020 and refer to the period 19 October to 1 November 2020 (although it is recognised some businesses might respond based on the current circumstances at the time of responding). This should be kept in mind in relation to local and national lockdowns and, dependent on the location and date when the business responded, this could have an impact on the estimates.

Of businesses currently trading, 10% identified their business as operating in the hospitality sector.

The accommodation and food services industry and the arts, entertainment and recreation industry had the highest percentages of businesses in the hospitality sector, at 86% and 19% respectively.

Across all businesses in the hospitality sector, business operation hours were changed in:

• 37% of businesses as a result of full closure

• 32% of businesses because of the 10pm curfew

There were other options available to businesses to indicate the reason for their business operation hours changing. A full list of options and percentages as a proportion of UK businesses can be found within the accompanying dataset.

Within the accommodation and food service activities industry, 38% of businesses altered their operating hours as a result of full closure and 46% because of the 10pm curfew.

Within the arts, entertainment and recreation industry, 60% of businesses altered their operating hours as a result of full closure and 30% because of the 10pm curfew.

For businesses currently trading within the hospitality sector, the change in operating hours resulted in:

• 80% of businesses experiencing a decrease in trade, and 19% experiencing the same trading levels

• 76% of businesses experiencing a decrease in footfall, and 18% experiencing no change in footfall (but may have seen a shift to adapt to the changed hours)

• Less than 1% of businesses experiencing an increase in trade or footfall because of the changes in operating hours

Businesses that were currently trading were asked if they expect to temporarily or permanently close any businesses sites in the next two weeks.

Of businesses currently trading, 7% 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 25%. 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, 21% expect to close a business site in the South East of England, 17% in Greater London, 17% in the South West of England, and 13% in the East Midlands.

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

• 83% are closing because of lockdown regulations

• 22% are closing as a result of there being insufficient customer interest or footfall

• 17% are closing because the business is not financially viable to keep open

In Wave 17, 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 62%, with an additional 24% not sure how the number of workers from within the EU at their business had changed and 4% preferring not to say.

The accommodation and food service activities industry, and the administrative and support service activities industry had the highest percentages of businesses with a decreased number of workers from within the EU, at 19% and 12% respectively.

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 65%, with an additional 26% 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 and the administrative and support service activities industry had the highest percentages of businesses with a decreased number of workers from outside the EU, at 10% and 6% respectively.

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 (2% net decrease).

Access to BICS-related microdata

The BICS microdata for Waves 1 to 16 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.

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.

Wave 17 of BICS saw an increase in the sample from approximately 24,500 to approximately 38,000, with an increase in the proportion of small- and medium-sized businesses being sampled.

The business indicators are based on responses from the voluntary, fortnightly BICS, which captures businesses' views on the impact on turnover, workforce, prices, trade and business resilience. The Wave 17 survey was live for the period 2 to 15 November 2020, and businesses were asked about their experience for the two-week survey reference period, 19 October to 1 November 2020. The survey questions are available.

The different experiences of businesses during the coronavirus pandemic

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 businesses' responses may cover any two-week time period across the following reference periods respectively: 19 October to 1 November 2020 and 2 to 15 November 2020. More detail on the type of questions asked is available in the accompanying dataset.

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.

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

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.

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 17 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 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.