Business insights and impact on the UK economy: 17 December 2020

The impact of the coronavirus pandemic and EU transition period 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:
17 December 2020

Cyhoeddiad nesaf:
7 January 2021

1. 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:

The new Business insights and impact on the UK economy dataset page contains comprehensive weighted datasets (including industry and size band breakdowns) for Wave 7 onwards. There have been minor revisions to previously published headline estimates. Previously published datasets for Waves 14 to 17 have also been included in this new page, and all future datasets for this release will be made available there.

Previously published unweighted Business Impact of Coronavirus (COVID-19) Survey (BICS) results for Waves 1 to 13 and unweighted regional results up to Wave 17 can still be found on the old Business Impact of Coronavirus (COVID-19) Survey (BICS) results dataset page, but the page will no longer be updated.

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2. Main points

  • 43% of businesses in the accommodation and food service activities industry were temporarily closed or paused trading, compared with 17% across all industries.

  • Over three-quarters of businesses in the accommodation and food service activities industry experienced a decrease in turnover compared with normal expectations for this time of year.

  • Across all industries, 3 in 10 businesses had less than three months' cash reserves, rising to over 50% of businesses in the other service activities industry.

  • 3 in 10 businesses in the accommodation and food service activities industry had no or low confidence that they would survive the next three months, with 12% in the accommodation industry and 31% in the food and beverages service activities industry.

  • The proportion of businesses' workforce on furlough leave has increased slightly to 16%, doubling from 8% in Wave 16 (5 to 18 October 2020).

  • Of businesses where preparedness for the end of the EU transition period is relevant, 20% of businesses are fully prepared, compared with 43% that are somewhat prepared and 12% that are not at all prepared; an additional 25% are not sure if they are prepared for the end of the EU transition period.

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3. Current trading status of businesses

The data presented here are final results from Wave 19 of the Business Impact of Coronavirus (COVID-19) Survey (BICS), which was live for the period 30 November to 13 December 2020.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 16 to 29 November 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.

For experimental weighted regional estimates, please see Business insights and impact on the UK and sub-national economy.

Figure 1 shows the trend in weighted trading status estimates between Wave 7 (15 to 28 June 2020) and Wave 19 (30 November to 13 December 2020).

The percentage of businesses currently trading has increased to 80% in Wave 19 (30 November to 13 December 2020), as coronavirus restrictions in England eased on 3 December 2020 following a four-week national lockdown. This is compared with 77% in Wave 18 (16 to 29 November 2020). The highest percentage of businesses currently trading was 86% in Wave 14 (21 September to 4 October 2020) and Wave 15 (5 to 18 October 2020) and the lowest percentage was 66% in Wave 7 (15 to 28 June 2020).

Across all industries:

  • 76% of businesses had been trading for more than the last two weeks

  • 5% of businesses had started trading within the last two weeks after a pause in trading

  • 7% of businesses were paused trading but intended to restart in the next two weeks

  • 10% of businesses were paused trading and did not intend to restart in the next two weeks

  • 3% of businesses had permanently ceased trading

The accommodation and food service activities industry had the highest percentage of businesses temporarily closed or paused trading, at 43%. When splitting the industry into finer detail, the accommodation industry had 60% of its businesses temporarily closed or paused trading, compared with 40% in the food and beverage service activities industry.

The arts, entertainment and recreation industry and the other service activities industry (which includes hairdressing and other beauty treatment activities) had the next highest percentages of businesses temporarily closed or paused trading, at 35% and 30% respectively.

The transportation and storage industry had the highest percentage of businesses that had permanently ceased trading, at 12%. This is driven by the experiences of small businesses in this industry, because when results are weighted by count, the experiences of smaller businesses dominate headline figures. When results are weighted by employment (an approach where larger businesses have a greater weight), only 1.2% of businesses in the transportation and storage industry had permanently ceased trading. More information on this can be found in the accompanying dataset.

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

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4. Businesses’ financial performance

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:

  • 45% experienced a decrease in turnover compared with normal expectations for this time of year

  • 38% experienced no impact on turnover

  • 8% experienced an increase in turnover compared with normal expectations for this time of year

Five industries had 50% or more of their businesses experiencing a decrease in turnover:

  • the accommodation and food service activities industry, at 78%

  • the arts, entertainment and recreation industry, at 71%

  • the other service activities industry (which includes hairdressing and other beauty treatment activities), at 70%

  • the education industry (private sector and higher education businesses only), at 57%

  • the administrative and support service activities industry, at 50%

When splitting the accommodation and food service activities industry into finer detail, the accommodation industry had 84% of its businesses experiencing a decrease in turnover compared with normal expectations for this time of year; this is compared with 75% 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 14%. Additional information on 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 19 (16 to 29 November 2020).

The percentage of businesses experiencing a decrease in turnover compared with normal expectations for this time of year decreased to 45% in Wave 19 (16 to 29 November 2020), after a sharp increase to 50% in Wave 17 (19 October to 1 November 2020). As a result, the percentage of businesses experiencing a decrease in turnover is now equal to the lowest percentage seen in Wave 16 (5 to 18 October 2020). The highest percentage of businesses experiencing a decrease in turnover was 65% in Wave 7 (1 to 14 June 2020).

Across all industries, of businesses currently trading:

  • 42% experienced a decrease in profits compared with normal expectations for this time of year

  • 35% experienced no impact on profits

  • 7% experienced an increase in profits compared with normal expectations for this time of year

Three industries had more than 50% of their businesses experiencing a decrease in profits:

  • the accommodation and food service activities industry, at 73%

  • the other service activities industry (which includes hairdressing and other beauty treatment activities), at 71%

  • the arts, entertainment and recreation industry, at 64%

When splitting the accommodation and food service activities industry into finer detail, the accommodation industry had 80% of its businesses experiencing a decrease in profits compared with normal expectations for this time of year; this is compared with 70% in the food and beverage service activities industry.

Conversely, the wholesale and retail trade industry and the transportation and storage industry had the highest percentages of businesses experiencing an increase in profits, at 11% and 10% respectively.

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5. Comparison with monthly GDP estimates across waves

Figure 6 shows how the fortnightly turnover estimates from the Businesses 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 BICS to the UK monthly GDP estimates

Net turnover balances of businesses currently trading against monthly GDP estimates, UK, 1 February to 29 November 2020

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Source: Office for National Statistics – Business Impact of Coronavirus (COVID-19) Survey

Notes:

  1. Final unweighted results, Wave 1 to Wave 6, and final weighted results, Wave 7 to Wave 19, 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.

Data download

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6. Business resilience

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:

  • 30% had between zero and three months' cash reserves

  • 16% had between four and six months' cash reserves

  • 36% had more than six months' cash reserves

The other service activities industry (which includes hairdressing and other beauty treatment activities) and the accommodation and food service activities industry had the highest percentages of businesses with between zero and three months' cash reserves, at 53% and 49% respectively.

Conversely, the education industry (private sector and higher education businesses only) and the professional, scientific and technical activities industry had the highest percentages of businesses that had cash reserves that would last more than six months, at 48% and 43% respectively.

Across all industries, of businesses not permanently stopped trading:

  • 12% had no or low confidence that their business would survive the next three months

  • 37% had moderate confidence that their business would survive the next three months

  • 43% 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 29%. When splitting the industry into finer detail, the accommodation industry had 12% of its businesses with no or low confidence that they would survive the next three months, compared with 31% in the food and beverage service activities industry.

The education industry (private sector and higher education businesses only) and the other service activities industry (which includes hairdressing and other beauty treatment activities) had the next highest percentages of businesses with no or low confidence, at 24% and 22% respectively.

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 68%.

The Business Impact of Coronavirus (COVID-19) Survey (BICS) also asks businesses that have not permanently stopped trading other questions on their business resilience, such as their risk of insolvency. These data can be found in the accompanying dataset.

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7. Workforce

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 19 (16 to 29 November 2020).

In Wave 19 (16 to 29 November 2020), 16% of the workforce were on furlough leave. This has doubled from 8% in Wave 16 (5 to 18 October 2020), after the furlough scheme was extended until March 2021 because of ongoing coronavirus (COVID-19) restrictions. The highest proportion of the workforce on furlough leave was 30% in Wave 7 (1 to 14 June 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) 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:

  • 16% of the workforce were on partial or full furlough leave

  • 29% 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 Coronavirus Job Retention Scheme (CJRS), at 53%. 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 28% respectively.

When splitting the accommodation and food service activities industry into finer detail, the accommodation industry had 73% of its workforce on partial or full furlough leave, compared with 34% 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 79% and 68% respectively.

The Business Impact of Coronavirus (COVID-19) Survey (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.

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8. Site closures

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 30 November to 13 December 2020. 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, 5% 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 19%. When splitting the industry into finer detail, the accommodation industry had 22% of its businesses expecting to temporarily or permanently close a business site in the next two weeks, compared with 18% in the food and beverage service activities industry.

For experimental weighted regional estimates, including data on businesses' trading status, please see Business insights and impact on the UK and sub-national economy.

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9. Preparedness for the end of the EU transition period

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

In Wave 19, across all industries, of businesses currently trading:

  • 8% are fully prepared for the end of the EU transition period

  • 17% are somewhat prepared for the end of the EU transition period

  • 5% are 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 10% not sure how prepared they are for the end of the EU transition period.

Of businesses where preparedness for the end of the EU transition period is relevant, 20% of businesses are fully prepared, compared with 43% that are somewhat prepared and 12% that are not at all prepared. An additional 25% are not sure if they are prepared for the end of the EU transition period.

Data on the reasons businesses are 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 3 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.

Across all businesses currently trading and who are stockpiling goods or materials, the percentage of businesses who intend to make changes to their supply chains in preparation for the end of the EU transition period has increased from 2% in Wave 18 (16 to 29 November 2020) to 3% in Wave 19 (30 November to 13 December 2020). However, the percentage of businesses that are stockpiling from EU suppliers and who intend to make changes to their supply chains has decreased from 27% to 18%.

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

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10. EU and non-EU workers

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 19, 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 23% not sure how the number of workers from within the EU at their business had changed, and 5% preferring not to say.

In Wave 19, across all industries, of businesses not permanently stopped trading:

  • less than 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 had the same number of workers from outside the EU, at 65%, with an additional 26% not sure how the number of workers from outside the EU at their business had changed, and 5% 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 (negative 6%) compared with the number of workers from outside the EU (negative 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:

  • 24% 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

  • 18% would prefer not to say

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11. Business Impact of Coronavirus (COVID-19) Survey data

Business insights and impact on the UK economy
Dataset | Released 17 December 2020
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 the end of the EU transition period in a timely way.

Access to microdata

The BICS microdata for Waves 1 to 18 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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12. 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 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 is due to come 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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13. Measuring the data

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 19 survey was live for the period 30 November to 13 December 2020. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 16 to 29 November 2020. The survey questions are available.

End of the EU transition period

After the transition period ends on 31 December 2020, the UK statistical system will continue to collect and produce our wide range of economic and social statistics. We are committed to continued alignment with international statistical standards, enabling comparability both over time and internationally. We will work with users of statistics to make sure they have the data they need to support the decisions they have to make.

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 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 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.

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14. Strengths and limitations

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 and the end of the EU transition period 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 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.

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.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

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