Business insights and impact on the UK economy: 11 March 2021

The impact of the coronavirus pandemic and other events on UK businesses and the economy. Based on responses from the voluntary fortnightly business survey (BICS) about financial performance, workforce, prices, trade, and business resilience.

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Cyswllt:
Email Jon Gough

Dyddiad y datganiad:
11 March 2021

Cyhoeddiad nesaf:
25 March 2021

1. Main points

  • The proportion of businesses' workforce on furlough leave remains broadly stable at 19%, which equates to approximately 6.2 million employees, in mid-February 2021.

  • 69% of businesses reported that none of their sites were temporarily or permanently closed (in line with the proportion currently trading), whilst the South East and London had the highest percentages of sites temporarily or permanently closed, both at 6%, equating to around 34,000 and 24,000 businesses respectively.

  • Five industries have more than 50% of currently trading businesses experiencing a decrease in turnover compared with what is expected for this time of year.

  • Of all businesses currently trading, 7% are providing regular coronavirus testing to the workforce, and of those businesses 11% of their workforce are being tested.

  • The human health and social work activities industry (private sector businesses only) reported the highest proportion of currently trading businesses that are providing regular coronavirus testing to their workforce, at 42%, and of those businesses 56% of their workforce are being tested.

  • Additional paperwork was the biggest exporting challenge and change in transportation costs the biggest importing challenge faced by businesses who had exported or imported in mid-February.

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2. Other pages in this release

More commentary on the impacts of the coronavirus (COVID-19) pandemic on the UK economy and society is available on the following pages:

More about economy, business and jobs

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3. Headline figures

The data presented here are final results from Wave 25 of the Business Insights and Conditions Survey (BICS), which was live for the period 22 February to 7 March 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 8 to 21 February 2021.

All four nations within the UK were subject to lockdowns for the duration of the reference and survey live periods.

For experimental single site weighted regional estimates that have been updated up to Wave 21 (29 December 2020 to 10 January 2021), please see Understanding the business impacts of local and national restrictions: February 2021.

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

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Notes:

  1. Final weighted results, Wave 7 to Wave 25 of the Office for National Statistics' (ONS') Business Insights and Conditions Survey (BICS).

  2. Weighted estimates are available 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. Data are plotted in the middle of the two-week period of each wave.

  4. Trading status: all businesses; for presentational purposes, currently trading categories and paused trading categories have been combined.

  5. Financial performance: businesses currently trading; for presentational purposes, decreased turnover categories and increased turnover categories have been combined, and the option "Not sure" has been removed.

  6. Business resilience: businesses not permanently stopped trading; for presentational purposes, cash reserves categories between zero and three months have been combined, and the option "Not sure" has been removed.

  7. Workforce: businesses not permanently stopped trading; for presentational purposes, the options "On sick leave or not working because of coronavirus (COVID-19), self-isolation or quarantine", "Made permanently redundant" or "Other" have been removed.

  8. 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.

Download the data

Trading status

The percentage of businesses currently trading has remained stable throughout January, February and early March 2021, at 74%. This reflects the continuing coronavirus (COVID-19) restrictions throughout these months. These levels are similar to those seen in early July 2020, when coronavirus restrictions were also widespread across the UK.

This percentage of businesses currently trading is low compared with 84% of businesses currently trading in mid-December 2020.

Tighter restrictions in EnglandScotland and Wales were introduced in late December 2020. National lockdowns in England and Scotland commenced on 4 January 2021, and Northern Ireland and Wales were also already in national lockdowns by this point.

Businesses that had not permanently stopped trading were asked to identify where their business sites were temporarily or permanently closed.

Approximately 7 in 10 businesses reported that none of their identified businesses’ sites were temporarily or permanently closed, which is in line with the percentage of businesses currently trading.

The South East and London had the highest percentages of businesses with sites temporarily or permanently closed, both at 6%. This equates to approximately 24,000 business sites in the South East and 31,000 business sites in Greater London. These numbers are based on multiplying the weighted BICS site closures percentages by the total number of local units identified in each region on the Inter-Departmental Business Register (IDBR) for all businesses in the population that could be sampled for BICS.

Financial performance

The percentage of currently trading businesses experiencing a decrease in turnover in mid-February 2021 (Wave 25), compared with normal expectations for this time of year, has fallen by 2 percentage points since early February (Wave 24), to 44%. This was last lower in mid-December 2020 (Wave 21) when it was 42%.

This slight fall in the percentage of businesses experiencing a decrease in turnover is driven by the transportation and storage industry, the wholesale and retail trade industry, and the accommodation and food service activities industry, which, respectively, saw a 7-percentage point, 4-percentage point and 4-percentage point fall in the percentage of businesses experiencing a decrease in turnover.

Prior to August 2020, when the original coronavirus restrictions were in place, the percentage of businesses experiencing a decrease in turnover compared with normal expectation was consistently above 50%, reaching 65% in early June 2020 (when comparable estimates began). When compared with the 44% of businesses experiencing a decrease in turnover in most recent estimates, this suggests current lockdown restrictions do not seem to be having the same scale of impact, perhaps because of businesses adapting.

Conversely, the percentage of businesses whose turnover has not been affected has remained stable at 38% since early January 2021, whilst the percentage of businesses experiencing an increase in turnover has risen from 6% in mid-January 2021 to 8% at the beginning of February.

Business resilience

The percentage of businesses with three months’ cash reserves or less (including no cash reserves) has remained stable from January 2021 to early March, at 31%. A large proportion of 2020 (mid-June to early-November), the percentage of businesses with three months’ cash reserves or less was broadly flat, at approximately 27%, fluctuating between 26% and 29%. However, this percentage has slowly been increasing from the end of November 2020 to its current levels, at 31%.

Conversely, the percentage of businesses with more than six months’ cash reserves has consistently been higher than the percentage with three months or less. On average, from late July 2020 to early March 2021, the percentage of businesses with more than six months’ cash reserves has remained stable at approximately 35%, fluctuating between 31% and 37%.

Workforce

The proportion of businesses' workforce on furlough leave increased from 11% in early December 2020 to 19% in mid-February 2021. This level was last seen in late July 2020, when coronavirus restrictions were also widespread.

The 19% of businesses' workforce on furlough leave in mid-February 2021 equates to approximately 6.2 million people. These numbers are based on multiplying the BICS-weighted furlough proportions by the Inter-Departmental Business Register (IDBR) total annual employment. This will not be consistent with employment estimates from Labour market statistics as these are based on different sources over different time periods but it provides an early indication. Additionally, the BICS proportion furloughed does not include the public sector, financial sector and parts of agriculture.

For an overview of the similarities and differences between the fortnightly BICS furlough estimates and HM Revenue and Customs' (HMRC's) Coronavirus Job Retention Scheme (CJRS) data, over the period March 2020 to January 2021, please see Comparison of furloughed jobs data, UK: March 2020 to January 2021.

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4. Industry insights

Trading status

The other service activities industry had the lowest percentage of businesses currently trading, at 26%. This was driven by businesses in hairdressing and other beauty treatments activities, where our estimates suggest that 96% were temporarily closed or paused trading.

The accommodation and food service activities industry was the other industry where less than 50% of businesses were currently trading, at 43%.

Financial performance

The accommodation and food service activities industry had the highest percentage of businesses experiencing a decrease in turnover compared with normal expectations, at 73%, which has fallen by 3 percentage points since early February 2021 (Wave 24).

Since June 2020, when comparable estimates began and previous lockdown restriction measures were continuing, the accommodation and food service activities industry has consistently had more than two-thirds of its businesses experiencing a decrease in turnover, with the exception of August 2020, when the percentage of businesses in the accommodation and food service activities industry experiencing a decrease in turnover was 57%. This may be because of the "Eat Out To Help Out scheme", a government policy measure aimed to support businesses reopening after the first coronavirus lockdown ended in June 2020.

Data on businesses' profits are available in the accompanying dataset.

Business resilience

More than half of businesses in the other service activities industry (which includes hairdressing and other beauty treatment activities), and the accommodation and food service activities industry (56% and 51%, respectively) have been reporting three months' or less cash reserves since mid-December.

Conversely, the real estate industry had the lowest percentage of businesses with three months or less in cash reserves (including no cash reserves), at 21%.

The proportion of businesses in all industries with three months or less cash reserves has remained stable since June 2020 when comparable estimates began, despite significant changes in coronavirus (COVID-19) lockdown restrictions.

Data on businesses' survival confidence are available in the accompanying dataset.

Workforce

The arts, entertainment and recreation industry had the highest proportion of its workforce on furlough leave, at 61%. This was followed by the accommodation and food service activities industry, at 50%, which has decreased by 5 percentage points since the last wave (25 January to 7 February 2021). When this industry is split into finer detail, the food and beverage industry saw the greatest decrease in proportion of its workforce on furlough leave.

The information and communication industry had the highest proportion of its workforce working remotely instead of at their normal place of work, at 80%. This was followed by the professional, scientific and technical activities industry, at 71% and the education industry (private sector and higher education businesses only), at 69%.

Meanwhile, the human health and social work activities industry (private sector businesses only) had the highest proportion of its workforce at their normal place of work, at 73%. This was followed by the manufacturing industry, at 68%.

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5. Regular coronavirus (COVID-19) testing in the workplace

Businesses not permanently ceased trading were asked if their business was providing regular coronavirus (COVID-19) testing for their workforce, and of the businesses who were providing testing, what proportion of their staff were being tested.

Table 2 shows the percentage of only currently trading businesses conducting coronavirus testing, and the percentage of the workforce in these businesses providing testing, that are being tested. 

Of all businesses currently trading, 7% were providing regular coronavirus testing to their workforce in early March and, of those businesses, 11% of their workforce were being tested. This equates to less than 1% of the workforce in all businesses currently trading being tested.

The human health and social work activities industry (private sector businesses only) reported the highest proportion of currently trading businesses that were providing regular coronavirus testing to their workforce in early March, at 42%, and of those businesses 56% of their workforce were being tested. This was followed by the education industry (private sector and higher education businesses only) where coronavirus testing was being provided in 9% of currently trading businesses, but of those 25% of their workforce were being tested.

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6. Exporting and importing challenges

Of currently trading businesses, 12% had exported in the last 12 months and reported how their exporting compared with normal expectations for this time of year, and 13% had imported in the last 12 months and reported how their importing compared with normal. These businesses were then asked about the challenges they had experienced with exporting or importing in the last two weeks.

Of businesses that had exported or imported goods or services in the last 12 months, and of whom reported how their exports or imports compared with normal expectations for this time of year:

  • 39% experienced exporting challenges and 40% experienced importing challenges because of additional paperwork

  • 30% experienced exporting challenges and 42% experienced importing challenges because of a change in transportation costs (reports suggest a surge in shipping costs between China and Northern Europe over recent months)

  • 25% experienced exporting challenges and 34% experienced importing challenges because of customs duties or levies

  • 20% experienced exporting challenges and 26% experienced importing challenges because of disruption at the UK borders

The majority of internationally trading businesses responded that they did not experience any challenges with exporting, at 45%.

Table 4 compares how the most common exporting and importing challenges differ between smaller businesses (less than 250 employees) and larger businesses (250 or more employees).

When focusing on the manufacturing industry, the biggest challenge businesses faced when exporting was additional paperwork, at 63%, whilst the biggest challenge businesses faced when importing was a change in transportation costs, at 61%.

When focusing on the wholesale and retail trade industry, the biggest challenge businesses faced when exporting was additional paperwork, at 54%. For importing, it was the changes in transportation costs, at 52%.

A full industry breakdown is available in the accompanying dataset.

Figure 7 shows how the percentage of large businesses (with more than 250 employees) not experiencing any exporting or importing challenges has decreased since December 2020 (Wave 21) to mid-February 2021 (Wave 25).

The proportion of businesses experiencing export and import challenges has been generally increasing since December 2020 before plateauing in mid-February 2021. Most businesses attribute this change to the end of the EU transition period with additional paperwork, change in transportation costs, and custom duties and levies most commonly cited, as shown in Table 3. A full breakdown is available in the accompanying dataset.

There were 1,795 businesses who responded to both Wave 24 (25 January to 7 February 2021) and Wave 25 (8 to 21 February 2021) and were asked if they faced any exporting challenges. Of these businesses who reported no challenges exporting in Wave 24, 22% now indicated they faced exporting challenges in Wave 25.

For importing challenges between Wave 24 and Wave 25, 2,032 businesses responded to whether they had faced any importing challenges. Of the 770 businesses who reported no importing challenges in Wave 24, 28% now faced importing challenges in Wave 25.

For both import and export challenges, the top new challenges faced by businesses were additional paperwork and change in transportation costs.

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7. Movement of goods between Great Britain and Northern Ireland

Businesses that are currently trading were asked whether they had sent goods from Great Britain (GB) to Northern Ireland (NI) in the last 12 months.

Across all industries, 5% of currently trading businesses had sent goods from GB to NI in the last 12 months.

These businesses were asked a series of questions about their experience sending these goods over a two-week reference period (8 to 21 February 2021).

Businesses currently trading and who had sent goods from GB to NI in the last 12 months were also asked about the route they used to send goods between GB and NI, and whether they had made any changes to the route used or volume of goods being sent.

Of businesses currently trading and who had sent goods from GB to NI in the last 12 months, 88% reported that the main route they used for sending these goods was from GB directly to NI.

The majority of businesses that had sent, or intended to send, goods from GB to NI in the last two weeks had not made any changes to their main route for sending these goods, at 80%.

Table 6 shows how the volume of goods being sent from GB to NI has changed in the last two weeks, reported by businesses that had sent, or intended to send, goods in the last two weeks.

Additional data on these questions and businesses' experiences sending goods from Great Britain to Northern Ireland, including full industry breakdowns, are available in the accompanying dataset.

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8. Business Insights and Conditions Survey data

Business insights and impact on the UK economy
Dataset | Released 11 March 2021
Weighted estimates from the voluntary fortnightly business survey (BICS) about financial performance, workforce, prices, trade, and business resilience.

This dataset includes additional information collected as part of the survey not presented in this publication.

These data are not official statistics but have been developed to deliver timely indicators to help understand the impact of the coronavirus pandemic and other events in a timely way.

Access to microdata

The BICS microdata for Waves 1 to 24 can now be accessed via the Secure Research Service (SRS). The BICS microdata for each wave is released on a rolling basis in the week following the publication of each wave.

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 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.

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9. Glossary

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 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.

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10. Measuring the data

The Business Insights and Conditions Survey (BICS) is voluntary and the results are experimental.

Based on user feedback, the structure of the bulletin has changed to present a more rounded narrative of main business impacts (see Figure 1, for example). The purpose remains the same, to collect real-time information on important issues such as the coronavirus (COVID-19) pandemic and other events on UK businesses. All data is still available either within the bulletin or in the accompanying dataset.

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 25 survey was live for the period 22 February to 7 March 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 8 to 21 February 2021. The survey questions are available.

Survey name change

Based on user feedback, this survey has changed its name to the "Business Insights and Conditions Survey" (BICS) from Wave 24 onwards.

The purpose remains the same, to collect real-time information on important issues such as the coronavirus (COVID-19) pandemic and the end of the EU transition period.

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 provide unweighted estimates with a country and regional split for selected variables in the accompanying dataset. These should be treated with caution as only those that have responded to the survey are represented, and as such these are not fully representative of the UK as a whole. 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.

On 1 February 2021, experimental weighted regional estimates up to Wave 21 (28 December 2020 to 10 January 2021) were published in Understanding the business impacts of local and national restrictions: February 2021, as part of the Economic Review.

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

Unweighted regional estimates

Unweighted 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 Inter-Departmental Business Register (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 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.

Also, if there is a substantial difference between the response proportions of larger and smaller companies in a given region, this will be reflected in the top-line figures.

Sample

The sampling frame used in BICS was designed to achieve adequate coverage of the listed industries from the Monthly Business Survey (MBS). Coverage and response rate of the medium to largest businesses in terms of total employment are satisfactory to produce estimates on this basis.

All businesses with an employment of greater than 250 employees and that are included within the three monthly surveys (MBS, Retail Sales Index (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 rates 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 Standard Industrial Classification (SIC), it is not advisable given the sparseness of response in certain industries and size bands.

Coverage

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.

End of the EU transition period

As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, we are making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

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11. Strengths and limitations

Business Insights and Conditions Survey

The Business Insights and Conditions 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 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.

Insights of BICS: 23 March to 5 April (Wave 2) to 1 to 14 June (Wave 7) 2020 provides 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).

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Jon Gough
bics@ons.gov.uk
Ffôn: +44 (0)1633 456720