Business insights and impact on the UK economy: 18 November 2021

• The percentage of currently trading businesses has fallen slightly from 93% in late October 2021, to 91% in early November 2021; this is the first time the figure had fallen since January 2021 and is primarily led by the transportation and storage industry.

• Over a quarter (28%) of businesses currently trading reported a decrease in turnover compared with normal expectations for this time of year; this is up from 24% in late September 2021, and is the highest percentage since early August 2021.

• Of businesses not permanently stopped trading, 6% reported no or low confidence that they would survive the next 3 months, which compares with 4% reported in early October 2021; the figure was highest (13%) for businesses in the other service activities industry.

• Three-quarters (75%) of importing businesses that reported how their importing had been affected experienced a challenge importing in late October to early November 2021, up from 60% in late September 2021; a change in reference period for the question may have impacted responses.

• Approximately one in six (17%) of the workforce were estimated to be using a hybrid model of working in late October; this increased to over a fifth (21%) of the workforce in businesses with 100 employees or more.

• In early November 2021, half of businesses not permanently stopped trading reported that their workforce had already returned to their normal place of work; in contrast, 1 in 11 businesses do not expect their workforce to return to their normal place of work.

The data presented in this bulletin are the final results from Wave 43 of the Business Insights and Conditions Survey (BICS), which was live for the period 1 November to 14 November 2021.

For questions regarding the last month, businesses were asked for their experience for the reference period 18 October to 14 November 2021, although some businesses may have responded in relation to the point of completion of the questionnaire (1 November to 14 November 2021). This is consistent with previous waves of the survey.

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

For experimental single-site weighted regional estimates up to Wave 34 (28 June to 11 July 2021), please see Understanding the business impacts of local and national restrictions, UK: July 2021.

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

Notes:

1. Final weighted results, Wave 7 to Wave 43 of the Office for National Statistics' (ONS') Business Insights and Conditions Survey (BICS).
2. Trading status: for presentational purposes, currently trading categories and paused trading categories have been combined. From Wave 41, the response options "Currently trading and have been for more than the last two weeks" and "Started trading within the last two weeks after a pause in trading" changed to "Currently fully trading" and "Currently partially trading".
3. Business resilience: for presentational purposes, cash reserves categories between zero and three months have been combined, and the option "Not sure" has been removed. Data for Wave 42 is not available as the question was rotated out of the questionnaire and so it is compared with Wave 41.
4. Financial performance: for presentational purposes, decreased turnover categories and increased turnover categories have been combined, and the option “Not sure” has been removed. From Wave 43, the reference period for this question changed from “in the last two weeks” to “within the last month”, therefore caution should be taken when comparing to previous Waves.
5. Financial performance: businesses were asked for their experience for the reference period 18 October to 14 November 2021, however, businesses may respond from the point of completion of the questionnaire (1 November to 14 November 2021).
6. Data are plotted in the middle of the period of each wave.

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Trading status

The percentage of businesses currently trading has fallen slightly from 93% in late October 2021, to 91% in early November 2021; this is the first time this has fallen since January 2021. Meanwhile, the percentage of businesses temporarily closed or paused trading increased from 4% to 5% over the same period. The drop in the percentage of businesses currently trading is primarily led by the transportation and storage industry, which reported a 20-percentage point decrease in currently trading. The proportion of fully trading decreased 4 percentage points and partially trading decreased 16 percentage points.

Overall, across all industries, 91% reported they were currently trading, with 82% of businesses fully trading and 9% partially trading; 5% of businesses were temporarily closed or had temporarily paused trading.

Approximately three-quarters (74%) of businesses in the transportation and storage industry were currently trading, with 68% fully trading in early November 2021; this is down from 93% and 72% respectively from late October. The currently trading percentage is the lowest reported since early May 2021, when currently trading was at 67%. This low percentage comes mainly from the freight transportation by road and unlicensed carriers sub-industries.

The human health and social work activities industry, other service activities and real estate activities industries reported the largest percentages of businesses currently trading at 100%.

The definition of "currently trading" used within the Business Insights and Conditions Survey (BICS) refers to the business currently trading in any capacity. From October 2021 the currently trading response options cover both whether a business has completely reopened to trading at full capacity, as experienced before the coronavirus (COVID-19) pandemic, and if the business is operating at a reduced level of capacity but is still trading.

Financial performance

Businesses currently trading were asked how their turnover for the last month compared with normal expectations for this time of year:

• 28% of businesses reported a decrease in turnover compared with normal expectations for this time of year; this is up from 24% in early October 2021 and is the highest percentage since early August 2021.

• 7% of businesses reported an increase in turnover compared with normal expectations for this time of year, compared with 8% in early October.

• 51% of businesses reported no effect to turnover compared with normal expectations for this time of year; this is down from 54% in early October2021 and is now broadly in line with early September 2021.

In early November 2021, 48% of businesses in the other service activities industry reported to have experienced a decrease in turnover in the last month compared with normal expectations for this time of year. This compares with 50% in late September 2021. This high percentage is partly primarily led by the hairdressing and other beauty treatment sub-industry.

The arts, entertainment and recreation industry reported the second largest proportion of business's who experienced a decrease in turnover in the last month, rising from 29% in early October 2021 to 44% in early November 2021. This was primarily led by a reported fall in turnover within the activities of sport clubs sub-industry.

The real estate activities industry reported the largest percentage seeing no effect on turnover, at 70%, down from 77% in late September 2021. This was followed by the information and communication industry, at 63%, and the human health and social work activities, at 57%; these compare with 68% and 64% respectively in late September 2021.

Business survival confidence

Of all businesses not permanently stopped trading, 6% of businesses reported they have low or no confidence they would survive the next 3 months; this compares with 4% reported in early October 2021. In early November 2021, 13% of businesses in the other service activities industry reported they have low or no confidence they would survive the next 3 months. This is up from 4% in early October.

In contrast, 54% of businesses not permanently stopped trading reported high confidence they would survive the next 3 months, while 31% reported a moderate confidence. The remainder reported they were not sure.

Of businesses not permanently stopped trading, 4% reported they had low or no confidence they will meet their current debt obligations. The proportion that reported a high or moderate confidence was 47%, while 8% reported they were unsure, and the remaining 42% reported they do not have any debt obligations.

The accommodation and food service activities industry reported the highest percentage of businesses with a high or moderate confidence of meeting its current debt obligations, at 60%. This was followed by the wholesale and retail trade; repair of motor vehicles and motorcycles industry, at 59%. As well as indicating high or moderate confidence of meeting current debt obligations, these industries also reported a high or moderate confidence to survive the next three months, at 80% and 87% respectively. In contrast 73% of businesses in the other service activities industry reported high or moderate confidence to survive the next three months, while 13% of these businesses reported having low or no confidence of meeting their current debt obligations.

Data on full industry breakdowns are available in the accompanying dataset.

Workforce status

The proportion of the workforce estimated to be working from a designated workspace in the last two weeks was 61%, while 12% were estimated to be working from home. Approximately one in six employees (17%) of all not permanently stopped trading businesses were estimated to be using a hybrid model of working; this increased to nearly one in five employees (19%) when excluding businesses with 0 to 9 employees.

In late October 2021, businesses reported less than 1% of their workforce were on sick leave or not working because of coronavirus, self-isolation or quarantine. This proportion has remained stable since comparable estimates began in June 2020.

Businesses were asked about the extent, and their expectations, of employees returning to their normal place of work.

Of businesses not permanently stopped trading, approximately half reported that their workforce had already returned to their normal place of work and around one-third reported they were either not sure or the question was not applicable to them.

Of all businesses not permanently stopped trading, 50% of businesses reported their workforce had already returned to their normal place of work in early November 2021; this has increased from 34% in early September 2021 and from 20% in late April 2021, when the question was introduced.

In contrast, across all businesses not permanently stopped trading, 9% of businesses did not expect their workforce to return to their normal place of work, an increase from 4% in early September 2021.

In addition, businesses also reported on the timeframe they expect their workforce to return to their normal place of work:

• within the next month - 2%
• between 1 and 3 months – 3%
• between 4 and 6 months – 2%
• more than 6 months – 2%

The remainder were either not sure or the question was not applicable to them.

Businesses that selected a timeframe for their workforce to return to their normal place of work were also asked what proportion of the workforce they expect to return to work within that timeframe:

• more than half (51%) expect above 75% of the workforce to return to their normal place of work
• 13% expect between 50% and 75% of the workforce to return
• 12% expect between 25% and 49% of the workforce to return
• 10% expect less than 25% of their workforce to return
• 14% reported they were not sure

Data on full industry breakdowns are available in the accompanying dataset.

Businesses were also asked if they were using or intending to use increased homeworking as a permanent business model going forward, and their reasons for either doing so or not doing so.

The information and communication industry reported the highest percentage of all businesses intending to use increased homeworking as a permanent business model, at 51%. In contrast, the other service activities industry reported the highest percentage for not intending to use increased homeworking as a permanent business model, at 65%.

The reasons reported by businesses who indicated they planned to use an increased homeworking model going forward in early November 2021, compared with late October 2021 were:

• improved staff wellbeing – 65% (up from 63%)
• increased productivity – 53% (up from 45%)
• reduced overheads –53% (up from 49%)
• reduced carbon emissions – 43% (up from 34%)
• ability to recruit from a wider geographical pool in the UK – 23% (up from 22%)
• reduced sickness absence – 17% (up from 13%)
• ability to better match jobs to skills – 15% (unchanged)
• ability to recruit from a wider geographical pool internationally – 13% (unchanged)
• reduced wage bill – 4% (unchanged)

5% of businesses were not sure if they would use a homeworking model, down from 8% in early October.

The top three reasons reported by businesses who indicated they did not plan to use an increased homeworking model in early November 2021, compared with early October 2021 were:

• not suitable for our business – 90% (up from 89%)
• negative impact on working culture – 9% (up from 6%)
• reduced communication – 9% (up from 6%)

Businesses in the accommodation and food service activities industry and the wholesale and retail trade; repair of motor vehicles and motorcycles industry reported that an increased homeworking model was not suitable for their businesses at 100% and 93%, respectively.

Of currently trading businesses, 11% had exported and 11% imported in the last 12 months and reported how their exporting or importing compared with normal expectations for this time of year. These businesses were asked about the challenges they had experienced with exporting or importing in the last month. Caution should be taken as in Wave 43 the reference period for this question was updated from the last two weeks to the last month, which could have impacted the results seen below.

Figure 8: Exporting and importing figures from the Business Insights and Conditions Survey

Notes:

1. Final weighted results, Wave 12 to Wave 43 of the Office for National Statistics’ (ONS’) Business Insights and Conditions Survey (BICS).
2. Data are plotted in the middle of the two-week period of each wave.
3. Exporting or importing compared to normal expectations: Percentage of businesses currently trading and had reported they had exported/imported in the last year. For presentational purposes, “exporting/importing, but less than normal” and “not been able to export/import in the last month” have been combined.
4. Caution should be taken when interpreting these results based on the specific routing of this question meaning that only a small number of businesses responded.
5. Businesses were asked for their experience for the reference period however, businesses may respond from the point of completion of the questionnaire.
6. Data for the period 2 November to 13 December 2020 have been modelled due to changes to the routing of the question at this time.
7. From Wave 43, the reference period for these questions changed from “in the last two weeks” to “within the last month”, therefore caution should be taken when comparing to previous Waves.

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The proportion of currently trading businesses that experienced a challenge in exporting or importing, was 64% and 75% respectively in late October to early November 2021. This compared with 52% for exporting and 60% for importing in late September 2021. The data also suggests that businesses continue to be more likely to experience a challenge when importing rather than when exporting.

Additional paperwork and changes in transportation costs remain the top challenges for both exporting and importing. The proportion of currently trading businesses that reported experiencing these challenges exporting increased to stand at 54% and 41%, respectively, in early November 2021; businesses that reported experiencing these challenges while importing stood at 55% and 59%, respectively.

Of all surveyed industries, the wholesale and retail trade; repair of motor vehicles and motorcycles industry reported the highest percentages for experiencing a challenge with additional paperwork and a change in transportation costs while exporting, at 75% and 65% respectively.

For importing, the other service activities industry reported the highest percentage for experiencing a challenge with additional paperwork, at 71%, while the wholesale and retail trade; repair of motor vehicles and motorcycles industry reported the highest percentage for change in transportation costs, at 68%.

Of currently trading businesses that reported how their importing had been affected, 21% reported a lack of hauliers to transport goods or a lack of logistics equipment as a challenge in early November, compared with 22% in September 2021.

Further industry, size band and breakdowns of trade questions by type of export or import (goods, services or both) are available in the accompanying dataset. This includes an unweighted timeseries produced by linking samples from the Annual Business Survey (2018) and the Annual Survey of International Trade in Services (2019) to the Business Insights and Conditions Survey (BICS) microdata. A detailed description of the methodology can be found in this article.

Businesses not permanently stopped trading were asked if their business had been affected by recent increases in wholesale gas prices.

Businesses not permanently stopped trading were asked if they had been affected by recent increases in wholesale gas prices; one in eight businesses reported that their production, and or, suppliers were affected:

• production was affected, 1%
• suppliers were affected, 8%
• production and suppliers were affected, 4%

The accommodation and food service activities industry reported the highest percentage of businesses affected by the increase in wholesale gas prices, at 29%, followed by the manufacturing industry at 26% in early November 2021. Both were down from 38% and 23% respectively in late October 2021.

In contrast, 38% of businesses not permanently stopped trading reported their business was not affected by the increase in wholesale gas prices, up from 32% reported in late October 2021. The remainder reported they were not sure or not applicable.

Coronavirus

Coronaviruses are a family of viruses that cause disease in people and animals. They can cause the common cold or more severe diseases, such as COVID-19.

COVID-19

COVID-19 is the name used to refer to the disease caused by the SARS-CoV-2 virus, which is a type of coronavirus. The Office for National Statistics (ONS) takes COVID-19 to mean presence of SARS-CoV-2 with or without symptoms.

Reporting unit

The business unit to which questionnaires are sent is called the reporting unit. The response from the reporting unit can cover the enterprise as a whole or parts of the enterprise identified by lists of local units.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Business Insights and Conditions Survey (BICS) QMI, published on 20 May 2021.

The BICS is voluntary, and the results are experimental.

The results are based on responses from the voluntary fortnightly BICS, which captures businesses' views on financial performance, workforce, prices, trade, and business resilience. The Wave 43 survey was live for the period 1 November to 14 November 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 18 October to 31 October 2021. For questions regarding the last month, businesses were asked for their experience for the reference period 18 October to 14 November 2021, however, businesses may respond from the point of completion of the questionnaire (1 November to 14 November 2021).

The survey questions are available.

Coverage

The Monthly Business Survey (MBS) covers the UK for production and only Great Britain for services. The Retail Sales Index (RSI) and Construction are Great Britain-focused. Therefore, the BICS will be UK 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

For more information on the methodology of producing the Business Insights and Conditions Survey (such as weighting), please see the BICS QMI.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Business Insights and Conditions Survey (BICS) QMI, published on 20 May 2021.