Business Insights and Conditions Survey, analysis over time, UK: 24 August 2020 to 4 April 2021

• The panel of businesses used in this analysis responded to every wave of the Business Insights and Conditions Survey (BICS) over an eight-month period (August 2020 to April 2021); this article assesses whether longitudinal analysis can provide additional insight to the regular fortnightly analyses.

• Three measures of business health were used: trading status, turnover and cash reserves.

• Trading status changes little over time because these businesses are larger and more active than average.

• Turnover compared with normal expectations provides more insights of change, with businesses predominately moving between turnover having decreased and not being affected; the period from end of October 2020 to early December 2020 had the largest change, as businesses moved to report normal or lower than average turnover.

• Businesses reported general consistency in levels of cash reserves, with no clear shift to reporting reduced cash reserves, likely because of, in part, the availability of loans and grants.

The responses of businesses that responded in every wave over time between Waves 13 and 27 of the Business Insights and Conditions Survey (BICS) are used in this analysis. This time frame was selected as it spans a period covering minimal coronavirus (COVID-19) restrictions up to the third coronavirus lockdown.

Waves 13 to 27 can be categorised in the following terms:  

1. Phase 1: Waves 13 to 16 (24 August to 1 November 2020) - the majority of coronavirus restrictions had eased, across the UK

2. Phase 2: Waves 17 to 20 (19 October to 23 December 2020) - variable coronavirus restrictions with tier systems and localised or national lockdowns

3. Phase 3: Waves 21 to 27 (14 December 2020 to 4 April 2021) - the UK was in its third national lockdown. Note we restrict comparison to Waves 24 to 27 for all analysis

Some dates overlap as businesses were asked for their trading and cash reserves status at the point of questionnaire completion, and for their turnover status for the two weeks prior to the collection period (Table 1).

There were 999 businesses that responded to every wave from Wave 13 to 27 (this represents approximately 4% of all responding businesses to BICS between those waves). There is a greater proportion of larger businesses (greater than 250 employees), as they are sampled every wave, whereas smaller businesses (lower than 250 employees) may be rotated in and out. This means that this panel of 999 businesses will not reflect the wider BICS sample, but is valuable for longitudinal analysis because the profile of businesses is consistent over time. Further information of industry and workforce size breakdown can be found in Tables 2 and 3 in Section 8. Further information about the full BICS survey is available in the Business Insights and Impacts on the UK economy bulletin.

Of the panel of 999 businesses, 90% reported continuing to trade in every wave, while 10% reported they had temporarily closed or paused trading during at least one wave in this eight-month period. 

Comparing businesses across the four-wave time-periods, 98% of this panel of businesses were continuously trading in Phase 1. This declined to 93% of businesses continuously trading in Phase 2, during a period of variable restrictions across the UK (tier systems and lockdowns), although trading did increase in Waves 19 and 20 (before Christmas). The proportion then stabilised, at 92%, in Phase 3, when the whole of the UK entered or remained in a third national lockdown.

Figure 1 shows how the estimates of businesses responding to every survey wave included in this analysis compare with the weighted percentage of all businesses in the BICS analysis.

The businesses that responded to every survey wave between Waves 13 to 27 had a consistently higher proportion (on average 17 percentage points) currently trading compared with the weighted estimates of all businesses in the BICS. Tables 2 and 3 (see Section 8) show that while the profile of these businesses is skewed towards larger companies, it is not skewed towards particular industries, suggesting that the size of business impacts trading status.

Businesses were asked how their turnover compared with normal expectations for this time of year, for the reference period of the survey. Figure 2 is an interactive diagram that shows the flows of businesses that responded to each option for each wave combination.

Figure 2: The proportion of businesses that were trading and reported turnover as unaffected remained stable between August 2020 to March 2021

Percentage of responding businesses currently trading, broken down by waves, unweighted, UK, 24 August 2020 to 21 March 2021

Notes

1. Final unweighted results of Waves 13 to 16 and 18 to 27 of the Office for National Statistics’ (ONS) Business Insights and Conditions Survey (BICS) panel (n=903). Data for Wave 17 are excluded, as routing resulted in only a small percentage of businesses answering this question.
2. Businesses had to respond that they were currently trading in Waves 13 to 16 and in Waves 18 to 27, to be included in this figure. This equates to 903 businesses that responded out of the total 999.

In Phase 1, 30% of businesses consistently reported lower turnover than normal. This increased to 35% in Phase 2, and decreased slightly to 34% in Phase 3.

However, only 16% of the panel businesses have reported lower turnover than normal in every wave, highlighting that it has been possible to trade at similar levels compared with what is expected despite varying restrictions. Conversely, only 1% of the panel of businesses consistently reported higher turnover compared with normal expectations, 18% responded that their turnover had not been affected and 3% reported that they were not sure, in every wave from Wave 13 to 27.

The remaining 62% of businesses changed their response at some stage between the categories of turnover "having increased", "not being affected", "having decreased" and "'not sure". Businesses predominately moved between turnover having decreased, and not being affected. Businesses mainly reported normal or lower than average turnover between the end of October to early December 2020, when coronavirus regulations were variable throughout the UK.

Many businesses have reported cash flow issues during the coronavirus (COVID-19) pandemic, reflecting the adverse impact it has had on their turnover. By tracking this panel of businesses’ cash reserve responses over time, we can highlight businesses’ confidence in their own survival during different stages of the pandemic.

Figure 3: 3 in 10 of this panel of businesses have reported more than six months’ cash reserves across all waves from Wave 13 to 27

Percentage of responding businesses that have not permanently ceased trading, broken down by waves, UK, 7 September 2020 to 4 April 2021

Notes

1. Final unweighted results of Waves 13 to 27 of the office for National Statistics' (ONS) Business Insights and Conditions Survey (BICS) panel. (n = 997)
2. Businesses had to respond that they were not permanently ceased trading in Waves 13 and 27 to be included in this figure.

Of this panel of 999 businesses, 31% consistently reported having more than six months’ cash reserves, 30% consistently had no or less than six months’ reserves, and a further 12% consistently reported “Not sure” in every wave from Waves 13 to 27.

The remaining 27% have changed their assessment of their cash flow, with an equal balance in the direction of change.

Comparing businesses across the phases, 36% of this panel of businesses consistently reported no or less than six months’ cash reserves in Phase 1 when coronavirus restrictions had eased. Of these 36% of businesses, 89% continued to have consistently no or less than six months’ cash reserves, while 3% had more than six months’ cash reserves in Phase 3.

This stability in cash reserves may be explained by businesses using loans and grants offered to businesses to help support them through the coronavirus pandemic, or by changing the workforce.

For example, 25% of the panel of businesses have received a government-backed loan or finance agreement at some point during the coronavirus pandemic from Waves 18 (when the question was introduced) to 27.

Since Wave 20 (December 2020), businesses were asked if they expected to make any workforce redundant in the next three months. Responses suggested uncertainty over staff retention even among these more stable businesses. One in six businesses in this panel responded that they expected to make some of their workforce redundant in the next three months in one or more waves between Waves 20 to 27. A further 40% stated “Not sure” either consistently or in some waves, and only 44% of the business panel consistently responded that they expected no redundancies.

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.

The Business Insights and Conditions Survey (BICS) is voluntary and the results are experimental. They are based on responses from the voluntary fortnightly BICS, which captures businesses' views on financial performance, workforce, prices, trade, and business resilience. The survey was designed to give 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 Business Impact of Coronavirus (COVID-19) Survey: 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.

Comparison of unweighted estimates between waves should be treated with caution because of the voluntary nature of the survey, the differences in response rates, and dependency on those businesses that only responded in particular waves.

This analysis defined a panel of 999 businesses that responded to every wave of the BICS between Waves 13 and 27. The tables below (Tables 1 to 3) provide the wave dates, sample size, response rates and comparisons by industry and sizeband of how this panel of consistently responding businesses compares to a typical profile of responding businesses to BICS.