Business insights and impact on the UK economy: 14 January 2021

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 from 84% in Wave 20 (14 to 23 December 2020) to 71% in Wave 21 (29 December 2020 to 10 January 2021).
• The percentage of businesses currently trading in the accommodation and food service activities industry has fallen from 59% in Wave 20 to 37% in Wave 21, the lowest percentage recorded since comparable estimates began in Wave 7 (15 to 28 June 2020).
• A third of businesses in the accommodation and food service activities industry and the other service activities industry had no or low confidence that they would survive the next three months.
• The proportion of businesses’ workforce on furlough leave has increased from 11% in Wave 20 (30 November to 13 December 2020) to 14% in Wave 21 (14 to 27 December 2020).
• 25% of businesses that have traded internationally in the last 12 months, and for whom imports or exports have been different to normal expectations, reported that the disruption at the UK borders affected their ability to import goods and services and 18% reported it had affected their ability to export.

The data presented here are final results from Wave 21 of the Business Impact of Coronavirus (COVID-19) Survey (BICS), which was live for the period 29 December 2020 to 10 January 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 14 to 27 December 2020. These dates 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.

Also to note, the reference period for this data overlaps the dates when an EU trade deal was agreed on 24 December 2020 and when the EU transition period ended on 31 December 2020. Therefore, data should be interpreted with these dates in mind and how these events may have impacted responses.

Figure 1 shows the trend in weighted trading status estimates between Wave 7 (15 to 28 June 2020) and Wave 21 (29 December 2020 to 10 January 2021).

The percentage of businesses currently trading has decreased to 71% in Wave 21 (29 December 2020 to 10 January 2021). This is compared with 84% in Wave 20 (14 to 23 December 2020). This percentage of businesses currently trading is lower than the percentage seen in Wave 8 (29 June to 12 July 2020), at 72%. However, since weighted results have been produced, Wave 7 (15 to 28 June 2020) still has the lowest percentage of businesses currently trading, at 66%.

This decrease in the percentage of businesses currently trading is likely because of changes in coronavirus (COVID-19) restrictions over the reference period. For example, additional areas of England were moved into Tier 4, as well as London and the South East, before a national lockdown in England was announced on 4 January 2021. In addition, Scotland was moved into a national lockdown during this period. Northern Ireland and Wales were also already in national lockdowns prior to the start of the reference period.

Across all industries:

• 68% of businesses had been trading for more than the last two weeks
• 3% of businesses had started trading within the last two weeks after a pause in trading
• 9% of businesses had paused trading but intended to restart in the next two weeks
• 18% 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 industry had the lowest percentage of businesses currently trading, at 37%. When splitting the industry into finer detail, the accommodation industry had 31% of its businesses currently trading, compared with 38% in the food and beverage service activities industry.

This was followed by the other service activities industry (which includes hairdressing and other beauty treatment activities) and the arts, entertainment and recreation industry, both of which also had less than half of their businesses currently trading, at 43% and 49% respectively.

The real estate activities industry and the education industry (private sector and higher education businesses only) had the highest percentages of businesses permanently ceased trading, at 11% and 6% respectively.

Figure 3 shows the trend in weighted trading status estimates for the accommodation and food service activities industry between Wave 7 (15 to 28 June 2020) and Wave 21 (29 December 2020 to 10 January 2021).

Since Wave 7 (15 to 28 June 2020), the accommodation and food service activities industry has seen the percentage of businesses currently trading change significantly because of coronavirus (COVID-19) restrictions. In Wave 21 (29 December 2020 to 10 January 2021), the percentage of businesses currently trading in the accommodation and food service activities industry decreased to 37%, the lowest percentage recorded since comparable estimates began in Wave 7 (15 to 28 June 2020). This is compared with 59% in Wave 20 (14 to 23 December 2020) and 41% in Wave 7. The highest percentage of businesses currently trading in the accommodation and food service activities industry was 88% in Wave 15 (5 to 18 October 2020).

Table 1 shows how the trading status of larger businesses compares with micro businesses (businesses with fewer than 10 employees).

For experimental single site weighted regional estimates up to Wave 18 (16 to 29 November 2020), please see Business insights and impact on the UK and sub-national economy.

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 in the last two weeks, compared with normal expectations for this time of year.

Across all industries, of businesses currently trading:

• 42% experienced a decrease in turnover compared with normal expectations for this time of year
• 42% experienced no impact on turnover
• 7% experienced an increase in turnover compared with normal expectations for this time of year

The accommodation and food service activities industry and the arts, entertainment and recreation industry had the highest percentages of businesses experiencing a decrease in turnover compared with normal expectations for this time of year, both at 76%. This was followed by the other service activities industry (which includes hairdressing and other beauty treatment activities), at 69%.

When splitting the accommodation and food service activities industry into finer detail, the accommodation industry had 79% of its businesses experiencing a decrease in turnover compared with normal expectations for this time of year; this is compared with 74% in the food and beverage service activities industry.

Conversely, the wholesale and retail trade industry had the highest percentage of businesses experiencing an increase in turnover, at 12%. Additional historical data on the retail trade industry is available in Retail sales, Great Britain.

Figure 5 shows the trend in weighted turnover estimates between Wave 7 (1 to 14 June 2020) and Wave 21 (14 to 27 December 2020).

The fall in the percentage of businesses experiencing a decrease in turnover may be because of several factors. Firstly, only businesses currently trading respond to this question and are therefore likely to have a strong enough financial performance to do so. While, businesses that struggle in their financial performance during coronavirus restrictions may have paused or ceased trading altogether, meaning that their financial performances are therefore not captured in these estimates. Secondly, seasonal effects, such as Christmas-related demand, may have played a part of this trend. In addition, these data were collected in the reference period 14 to 27 December 2020, and during this time Wales and Northern Ireland entered national lockdowns (20 and 26 December, respectively), whilst additional areas of England and Scotland were moved into their respective Tier 4 restrictions.

Data on businesses’ profits showed similar percentages and trends as seen for the turnover variable. These data are available in the accompanying dataset.

Figure 6 shows how the fortnightly turnover estimates from the Business Impact of Coronavirus (COVID-19) Survey (BICS) compare with the published UK monthly gross domestic product (GDP) estimates.

Figure 6: Comparing the fortnightly net turnover balance estimates from Business Impact of Coronavirus Survey to the UK monthly gross domestic product estimates

Net turnover balances of businesses currently trading against monthly GDP estimates, UK, 1 February to 27 December 2020

Notes:

1. Final unweighted results, Wave 1 to Wave 6, and final weighted results, Wave 7 to Wave 21, of the Office for National Statistics' (ONS') Business Impact of Coronavirus (COVID-19) Survey (BICS); businesses currently trading.
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. 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.
4. Monthly gross domestic product (GDP) publications are available.

Download the data

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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:

• 32% had less than three months' cash reserves (including no 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 had the highest percentage of businesses with less than three months' cash reserves, at 52%. This was followed by the other service activities industry (which includes hairdressing and other beauty treatment activities) and the construction industry, at 45% and 40% respectively.

When splitting the accommodation and food service activities industry into finer detail, the accommodation industry had 47% of its businesses with less than three months’ cash reserves; this is compared with 54% in the food and beverage service activities industry.

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 48% and 47% respectively.

Across all industries, of businesses not permanently stopped trading:

• 15% had no or low confidence that their business would survive the next three months
• 38% had moderate confidence that their business would survive the next three months
• 40% had high confidence that their business would survive the next three months

The accommodation and food service activities industry and the other service activities industry (which includes hairdressing and other beauty treatment activities) had the highest percentages of businesses that had no or low confidence that their business would survive the next three months, at 34% and 32% respectively.

When splitting the accommodation and food service activities industry into finer detail, the accommodation industry had 25% of its businesses with no or low confidence that they would survive the next three months; this is compared with 35% in the food and beverage service activities industry.

Conversely, the real estate activities industry had the highest percentage of businesses that had high confidence that their business would survive the next three months, at 65%.

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 as opposed to percentages of businesses as is the case for other sections.

Figure 9 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 21 (14 to 27 December 2020).

In Wave 21 (14 to 27 December 2020), the proportion of businesses’ workforce on furlough leave increased from 11% in Wave 20 (30 November to 13 December 2020) to 14%. The highest proportion of the workforce on furlough leave was 30% in Wave 7 (1 to 14 June 2020) and the lowest proportion was 8% in Wave 16 (5 to 18 October 2020).

During the period 14 to 27 December 2020, based on the 14% presented in the previous paragraph, approximately 4.6 million people were on furlough leave. This number is 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 provides an indication. Additionally, this 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 1 May to 31 July 2020, please see Comparison of furloughed jobs data: May to July 2020.

Across all industries, of businesses not permanently stopped trading:

• 14% of the workforce were on partial or full furlough leave
• 32% of the workforce were working remotely instead of at their normal place of work
• 51% of the workforce were working at their normal place of work

The arts, entertainment and recreation industry had the highest proportion of their workforce on partial or full furlough leave under the terms of the UK government's CJRS, at 51%. This was followed by the accommodation and food service activities industry and the other service activities industry (which includes hairdressing and other beauty treatment activities), at 42% and 30% respectively.

When splitting the accommodation and food service activities industry into finer detail, the accommodation industry had 78% of its workforce on partial or full furlough leave; this is compared with 32% in the food and beverage service activities industry.

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 78% and 69% respectively.

The BICS also asks businesses that have not permanently stopped trading questions on which government schemes they are applying for and/or receiving. These data can be found in the accompanying dataset.

The data presented here is in reference to the period 14 to 27 December 2020. On 20 December 2020, many countries imposed border restrictions on the UK because of a new strain of the COVID-19 virus.

Currently trading businesses that had imported or exported goods or services in the last 12 months, and for whom imports or exports had been different compared with normal expectations for this time of year, were asked about the challenges they had experienced with importing or exporting in the last two weeks.

Across all industries, of businesses that had imported or exported goods or services in the last 12 months, and for whom imports or exports had been different compared with normal expectations:

• 18% experienced exporting challenges through disruption at the UK borders
• 8% experienced exporting challenges because of the destination countries changing their border restrictions
• 25% experienced importing challenges through disruption at the UK borders

The majority of businesses responded that they did not experience any challenges with importing or exporting, at 63% and 60% respectively.

When focusing on the manufacturing industry, the challenge that most businesses reported for both importing and exporting was disruption at the UK borders, at 20% and 27% respectively. A full industry breakdown is available in the accompanying dataset.

The Business Impact of Coronavirus (COVID-19) Survey (BICS) asked businesses that have not permanently stopped trading if they expect to temporarily or permanently close any business sites in the next two weeks.

The data collected here are for the period 29 December 2020 to 10 January 2021. 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 not permanently stopped trading, 10% expect to temporarily or permanently close a business site in the next two weeks.

The other service activities industry (which includes hairdressing and other beauty treatment activities) had the highest percentage of businesses expecting to temporarily or permanently close a business site in the next two weeks, at 31%. A full industry breakdown is available in the accompanying dataset.

For experimental single site weighted regional estimates up to Wave 18 (16 to 29 November 2020), please see Business insights and impact on the UK and sub-national economy.

The Business Impact of Coronavirus (COVID-19) Survey (BICS) asked businesses that are currently trading questions on their preparedness for the end of the EU transition period (31 December 2020).

These data were collected for the period 29 December 2020 to 10 January 2021. To note, the reference period overlaps the dates when an EU trade deal was agreed on 24 December 2020 and when the EU transition period ended on 31 December 2020. Therefore, data should be interpreted with these dates in mind and how these events may have impacted responses.

In Wave 20 (29 December 2020 to 10 January 2021), across all industries, of businesses currently trading:

• 10% were fully prepared for the end of the EU transition period
• 17% were somewhat prepared for the end of the EU transition period
• 6% were not prepared for the end of the EU transition period

The majority of businesses responded that preparation for the end of the EU transition period was not relevant for their businesses, at 60%, with an additional 7% not sure how prepared they were for the end of the EU transition period.

Of businesses where preparedness for the end of the EU transition period was relevant, 26% of businesses were fully prepared, compared with 42% that were somewhat prepared and 14% that were not at all prepared. An additional 18% were not sure if they were prepared for the end of the EU transition period.

Data on the reasons businesses were not at all prepared or somewhat prepared for the end of the EU transition period are available in the accompanying dataset.

Businesses that are currently trading were also asked if they were intending to make any changes to supply chains in preparation for the end of the EU transition period (31 December 2020).

Table 4 shows how the responses to the question on intending to change supply chains differs based on the businesses' response to whether they are stockpiling goods or materials from the UK, EU or non-EU suppliers.

Additional data on the businesses’ supply chains and the end of the EU transition period are available in the accompanying dataset.

The Business Impact of Coronavirus (COVID-19) Survey (BICS) asks businesses that have not permanently stopped trading how the number of workers from within and outside the EU at their business has changed since the start of the coronavirus (COVID-19) pandemic.

In Wave 21 (29 December 2020 to 10 January 2021), across all industries, of businesses not permanently stopped trading:

• 1% 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 (33%) had the same number of workers from within the EU, with an additional 19% not sure how the number of workers from within the EU at their business had changed, 35% reporting it was not relevant, and 4% preferring not to say.

In Wave 21, across all industries, of businesses not permanently stopped trading:

• 1% had an increased number of workers from outside the EU
• 4% had a decreased number of workers from outside the EU

The majority of businesses (23%) had the same number of workers from outside the EU, with an additional 20% not sure how the number of workers from outside the EU at their business had changed, 48% reporting it was not relevant, and 4% preferring not to say.

Across all industries, a greater net percentage of businesses reported a decrease in the number of workers from within the EU (7%) compared with the number of workers from outside the EU (3%).

Businesses that have not permanently stopped trading were also asked about their understanding of the changes to the immigration system on 1 January 2021.

Across all industries, of businesses not permanently stopped trading:

• 27% understand how the new immigration system will affect their business
• 44% neither understand nor do not understand
• 14% do not understand how the new immigration system will affect their businesses
• 15% would prefer not to say

Access to microdata

The BICS microdata for Waves 1 to 20 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.

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 Brexit 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.

The Business Impact of Coronavirus (COVID-19) Survey (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 20 survey was live for the period 29 December 2020 to 10 January 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 14 to 27 December 2020. The survey questions are available.

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.

Recently, experimental weighted regional estimates up to Wave 18 (16 to 29 November 2020) have been produced and published in Business insights and impact on the UK and sub-national economy.

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 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

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.

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 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).