Business insights and impact on the UK economy: 10 March 2022

• In late February 2022, the percentage of currently trading businesses rose to 94%, its highest level since comparable estimates began in June 2020.
• For businesses not permanently stopped trading, data suggest that fewer employees were working from home (11%), and more have moved to using a hybrid model of working (19%) in early February 2022; these figures have changed from 15% and 16% respectively in early January 2022.
• Approximately one in six (16%) businesses not permanently stopped trading experienced global supply chain disruption in the last month; this is unchanged from January 2022.
• Businesses not permanently stopped trading reported hourly wages were higher than normal for both existing (12%) and new employees (10%) in the last month; among businesses in the accommodation and food service activities industry, 37% and 33% reported hourly wages were higher for existing and new employees in the last month, up by 22 and 9 percentage points respectively, from January 2022.
• Three in five (60%) of businesses not permanently stopped trading reported they have concerns for their business in the next month; the top two concerns were inflation of goods and services prices (21%) and energy prices (15%).
• In late February 2022, 5% of businesses reported that they have low or no confidence of surviving the next three months; this percentage has fallen steadily since early December 2021; meanwhile, 38% of businesses reported to have three months or less of cash reserves, including no reserves.

The data presented in this bulletin are the final results from Wave 51 of the Business Insights and Conditions Survey (BICS), which was live for the period 21 February to 6 March 2022.

The final response rate for Wave 51 was 20.6% (7,859 responses), lower than the ongoing average of approximately 23%. The Wave 51 response rate means that the estimates in this release are subject to more uncertainty than usual.

For questions regarding the last month, businesses were asked for their experience for the reference period 7 February to 6 March 2022. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 7 February to 20 February 2022, although some businesses may have responded in relation to the point of completion of the questionnaire (21 February to 6 March 2022). This is consistent with previous waves of the survey.

These dates should be kept in mind in relation to coronavirus (COVID-19) guidance as the estimates could be affected by both the location of the business and the date on which the business responded.

For experimental single-site weighted regional estimates up to Wave 49 (24 January to 6 February 2022), please see Understanding the business impacts of local and national restrictions, UK: February 2022.

Figure 1: Headline figures from the Business Insights and Conditions Survey

Notes:

1. Trading status, financial performance, business resilience: for presentational purposes, response options have been combined and the option "not sure" has been removed.
2. Financial performance: businesses were asked for their experience for the reference period, however, businesses may respond from the point of completion of the questionnaire.
3. Data are plotted in the middle of the period of each wave.

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The percentage of businesses currently trading in late February 2022 was 94%, which is the highest percentage reported since comparable estimates began in June 2020.

The transportation and storage industry reported the lowest proportion of businesses currently trading, either fully or partially, at 83%. This is the lowest percentage reported since early December 2021 (83%), following a rise to 90% in mid-January 2022, however, the figure has remained broadly stable since early February 2022.

The administrative and support service activities industry reported the largest movement of currently trading businesses, up from 91% in early February 2022 to 96% in late February 2022. This is the highest percentage reported within this industry since comparable estimates began.

Of currently trading businesses, 56% reported that their turnover was the same in the last two weeks compared with normal expectations for this time of year. This is the highest percentage reported since comparable estimates began in June 2020.

In contrast, 27% reported a decrease in turnover, down from the 28% reported in late January 2022, and the lowest percentage reported since late September 2021 (24%).

Of businesses reporting a change in turnover in the last two weeks, 41% said the coronavirus (COVID-19) pandemic was the main reason for the change. This was down from 45% in late January 2022. A further 13% reported a combination of the coronavirus pandemic and the end of the EU transition period as the main reason.

Nearly a quarter (23%) of businesses reported “Other” factors as a reason for the change. This was the highest proportion of businesses to report this option since the question was first asked in late January 2021, with comments from businesses suggesting the weather, particularly the arrival of Storm Eunice in the UK, as having a negative impact on turnover.

The manufacturing industry reported the largest movement in the proportion of businesses who experienced a decrease in turnover in the last two weeks, dropping from 34% in late January 2022 to 23% in early February 2022.

Of businesses not permanently stopped trading, 88% reported they had high or moderate confidence they would survive the next three months, and 43% reported having four months or more of cash reserves. In contrast, the proportion of businesses that reported low or no confidence to survive dropped to 5%, continuing a downward trend, though the proportion reporting less than three months cash reserves remained broadly stable at 38%.

In late February 2022, the transportation and storage industry reported the highest percentage of businesses with low or no confidence of surviving the next three months at 9%, down from 16% in late January 2022. This compared with 33% of businesses within this industry who reported to have three months or less of cash reserves.

Estimates in early February 2022 of the proportion of employees working from home or using a hybrid model of working were similar to those in early January 2022. However, there is some evidence of a movement from working from home to a hybrid approach (Table 1).

Industries such as the professional, scientific, and technical activities industry, the information and communication industry, and the education industry (private sector and higher education businesses only), showed the largest percentage point change in this movement.

The majority of the workforce (62%) were estimated to be working from a designated workspace, that is, not from home, in early February 2022. This was unchanged from late January 2022 but up from 57% reported in late December 2021.

Businesses not permanently stopped trading were asked how existing and new employees’ hourly wages over the last month compared with normal expectations for this time of year.

The percentage of businesses who reported that hourly wages for their existing employees were higher in the last month compared with normal, increased to 12% in February 2022, up from 9% in January 2022. When excluding businesses with fewer than 10 employees, 27% reported hourly wages were higher than normal for existing employees in February 2022, up from 24% in January 2022.

Businesses were also asked how new employees’ hourly wages over the last month compared with normal expectations for this time of year. Across the responding businesses:

• 10% reported wages were higher
• 24% reported wages were not affected
• 2% reported wages were lower
• 64% reported they were either not sure, or that the question was not applicable

The accommodation and food service activities industry reported the highest percentage of businesses reporting hourly wages were higher for both existing and new employees in the last month, at 37% and 33% respectively. This industry also saw the largest movement, wave on wave, in hourly wages being higher for existing employees, increasing by 22 percentage points from the 15% reported in January 2022.

Of currently trading businesses with 10 employees or more, 17% had exported and 21% 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 month.

Figure 7: Exporting and importing figures from the Business Insights and Conditions Survey

Notes:

1. Exporting or importing compared with normal expectations: percentage of businesses currently trading with 10 or more employees and had reported they had exported or imported in the last year. For presentational purposes, response options have been combined.
2. Exporting or importing challenges: percentage of businesses currently trading with 10 or more employees reported they had exported or imported in the last year, and reported how their exports or imports were affected. Businesses may report that exporting or importing has not been affected but are still able to report challenges.
3. 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.
4. Businesses were asked for their experience for the reference period however, businesses may respond from the point of completion of the questionnaire.
5. Data are plotted in the middle of the period of each wave.
6. From Wave 49, all data presented within these graphs have been updated to reflect results reported by currently trading businesses with 10 or more employees, therefore caution should be taken when comparing to previous publications. This is to reduce the volatility that microbusinesses (businesses with zero to nine employees) can create between waves and to focus on the long-term trends.

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Of businesses currently trading with 10 or more employees that had exported in the last 12 months, 26% reported that they were unable to export or exported less in February 2022 compared with normal expectations. This is lower than the 29% reported by businesses with fewer than 10 employees; the percentage for these smaller businesses decreased 3 percentage points from the 32% reported in January 2022.

In contrast, of businesses currently trading with 10 or more employees, that had imported in the last 12 months, 18% reported that they were unable to import or imported less in the last month. This proportion is unchanged from January 2022. This figure was 30% for businesses with fewer than 10 employees, an increase of 2 percentage points from previously.

Further industry, size band and breakdowns of trade questions by type of export or import (goods, services or both) are available in the accompanying dataset. This includes an unweighted data time series 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. We have published a detailed description of the methodology.

The percentage of businesses not permanently stopped trading who reported experiencing global supply chain disruption in the last month, was unchanged from January 2022 at 16%. For businesses with 10 or more employees, this figure was also unchanged at 26%.

The other service activities industry reported the largest increase in the proportion of businesses experiencing global supply chain issues, up from 1% in January 2022 to 8% in February 2022. In contrast, the accommodation and food service activities industry reported the largest decrease, from 20% to 14%, over the same period.

Businesses not permanently stopped trading were asked what main concerns they had for their business over the next month.

The main concerns reported by businesses were:

• inflation of goods and services prices (21%), with the construction industry reporting the highest proportion (36%)
• energy prices (15%), with the other service activities industry reporting the highest proportion (48%)
• supply chain disruption (6%), with the wholesale and retail trade; repair of motor vehicles and motorcycles industry reporting the highest proportion (11%)
• taxation (5%), with the professional, scientific and technical activities industry reporting the highest proportion (11%)

Further details including full list of concerns broken down by industry and size band are available in the accompanying dataset.

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.

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, updated on 24 January 2022.

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 51 survey was live for the period 21 February to 6 March 2022. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 7 February to 20 February 2022. For questions regarding the last month, businesses were asked for their experience for the reference period 7 February to 6 March 2022. However, businesses may respond from the point of completion of the questionnaire (21 February to 6 March 2022). The survey questions are available.

Coverage

The Monthly Business Survey (MBS) covers the UK for production and only Great Britain for services. The Retail Sales Index (RSI) and Construction are Great Britain-focused. Therefore, the BICS will be UK-focused for production-based industries but Great Britain-focused 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 BICS, such as weighting, please see the BICS QMI.

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.