Business insights and impact on the UK economy: 21 October 2021

• The proportion of businesses' workforce reported to be on full or partial furlough leave fell to 4% in the two weeks that included 30 September (which marked the end of the Coronavirus Job Retention Scheme), representing a provisional approximate range of between 0.9 to 1.4 million people.

• The percentage of businesses currently trading was 92% in early October 2021, with 83% of businesses reporting they were fully trading and 9% partially trading.

• The other service activities industry (which includes hairdressing and other beauty treatments) reported the highest proportion of employees being furloughed (26%) and the lowest proportion of businesses currently fully trading (76%).

• Of currently trading businesses that reported how their importing had been affected, 22% reported lack of hauliers to transport goods or lack of logistics equipment as a challenge in late September 2021, up from 11% in April 2021; additional paperwork remains the most-reported challenge (at over 40%).

• Almost one in six businesses (16%) intend to use increased homeworking as a permanent business model going forward, with the main reasons for this being improved staff wellbeing, reduced overheads and increased productivity.

• Of businesses not permanently stopped trading, 37% reported taking at least one action to reduce their carbon emissions, whereas 22% reported taking no actions (others were not sure or did not produce carbon emissions).

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

• Economic activity and social change in the UK, real-time indicators

• Coronavirus and the social impacts on Great Britain

The data presented in this bulletin are the final results from Wave 41 of the Business Insights and Conditions Survey (BICS), which was live for the period 4 October to 17 October 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 20 September to 3 October 2021.

These dates should be kept in mind in relation to coronavirus (COVID-19) guidance as the estimates could be impacted 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 41 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. 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”.
4. 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 40 is not available as the question was rotated out of the questionnaire and so it is compared with Wave 39.
5. Financial performance: for presentational purposes, decreased turnover categories and increased turnover categories have been combined, and the option “Not sure” has been removed.
6. Workforce: for presentational purposes, the options “Made permanently redundant” and “Other” have been removed. From Wave 33, the response options for this question were updated but should not have had an effect on the percentages displayed here.
7. 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.

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The percentage of businesses currently trading was 92% in early October 2021. This compares with 90% in late September 2021.

Businesses currently trading were asked how their turnover compared with normal expectations for this time of year. Results were similar to two weeks previously:

• 24% of businesses reported a decrease in turnover compared with normal expectations for this time of year

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

• 54% of businesses reported no effect to turnover compared with normal expectations for this time of year

The proportion of businesses' workforce reported to be on full or partial furlough leave (the HM Revenue and Customs (HMRC) Coronavirus Job Retention Scheme (CJRS)) fell to 4% in late September 2021 (representing a provisional approximate range of between 3% to 5% of businesses' workforce).

The estimated 4% of businesses' workforce reported to be on full or partial furlough leave in late September 2021 suggests that approximately 0.9 to 1.4 million people were furloughed within the industries surveyed in BICS. Of the workforce reported to be on furlough, a higher proportion were partially furloughed than fully furloughed, with less than 2% of the workforce (approximately 0.2 to 0.7 million people) reported to be fully furloughed.

The furlough scheme ended on 30 September 2021 and businesses were asked for their experiences for the reference period 20 September to 3 October 2021. This overlaps with the end of the furlough scheme and therefore the figures reported here do not represent the position on 30 September, as some responses may reflect the situation after the scheme end.

The BICS estimate of the number of employees on furlough is based on multiplying the BICS weighted furlough proportions by the number of eligible employments¹ published in the HMRC CJRS official statistics, for only those industries covered by the BICS sample (exclusions from BICS are agriculture, public administration and defence, public provision of education and health and finance and insurance). Therefore, the BICS estimate is not fully representative of the true number of employees on furlough.

Figure 2 shows the relationship between the BICS estimates of not permanently stopped trading, and currently trading businesses in comparison to the HMRC's CJRS official statistics, up to 31 August 2021.

For current-point furlough estimates from BICS and looking forward as coronavirus (COVID-19) regulations remain relaxed, it is recommended to use the "businesses not permanently stopped trading" estimates. However, it is recommended to use the BICS "currently trading" series when reviewing as a time series or looking backwards. Please note that the BICS "currently trading" series represents a lower range for the percentage of the workforce on furlough, as the estimate does not contain paused trading businesses, which typically have a higher proportion of their workforce on furlough.

An updated overview of the differences between the fortnightly BICS furlough estimates and HMRC's CJRS figures, including the reasoning for recommendations, was published on 2 September 2021.

Notes for: Headline figures

1. An "employment" in the HMRC CJRS official statistics is defined as anyone who meets the scheme criteria set out within the published guidance. The data come from the whole population of HMRC CJRS claims (those applied) and Pay As You Earn (PAYE) Real Time Information systems (RTIs). The assessment of whether a person was employed on the qualifying dates is based on the methodology used for the joint HMRC and ONS statistics release, Earnings and employment from Pay As You Earn Real Time Information.

Trading status

It should be noted that the definition of currently trading used within the Business Insights and Conditions Survey (BICS) refers to the business currently trading in any capacity. From Wave 41 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.

The transportation and storage industry had the lowest proportion of businesses currently trading (partially or fully), at 83% in early October 2021. This is down from a peak of 94% in late September 2020; however, it is the highest proportion since mid-January 2021. The percentage of paused and permanently ceased traders is partly driven by the freight transport-by-road industry and the unlicensed carrier's industry.

Financial performance

In late September 2021, 50% of businesses in the other service activities industry reported experiencing a decrease in turnover in the last two weeks compared with normal expectations for this time of year. This high percentage is partly driven by the hairdressing and other beauty treatment sub-industry.

Seven industries have reported over 50% of businesses seeing no effect to their turnover in the last two weeks compared with normal levels for this time of year, in late September 2021. This is up from five industries in early September and includes the manufacturing, the administrative and support activities, the professional, scientific and technical activities, the construction, the human health and social work activities, the information and communication and the real estate activities industries. The real estate activities industry reported the largest percentage reporting no effect on turnover, at 77% in late September 2021, broadly unchanged from 76% in early September 2021. This was followed by the information and communication industry, at 68%.

Workforce

Approximately one in four (26%) of the workforce in the other service activities industry were reported to be on partial or full furlough leave in late September 2021. This has declined from a high of 79% in late January 2021 but has increased 8 percentage points since early September. This is driven by the other personal service activities sub-industry (which includes hairdressing and other beauty treatments), where 30% of the workforce was estimated to be on partial or full furlough in late September.

All other industries continued to report fewer than 10% of the workforce on furlough leave. Note that the industries reported in this publication are composed of combined sub-industries, for which we are unable to provide reliable estimates for because of low sample size.

In late September 2021, businesses reported less than 1% of their workforce were on sick leave or not working because of coronavirus, self-isolation or quarantine, and the 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 has already returned to their normal place of work and over one-third reported they were not sure or the question was not applicable to them.

Expectations among businesses that gave an opinion on future return to normal place of work are shown in Figure 6.

Of all businesses not permanently stopped trading, 48% of businesses reported their workforce had already returned to their normal place of work in early October 2021, this has increased from 34% in early September 2021.

Within the arts, entertainment and recreation industry, 17% of businesses reported they expect their workforce to return to their normal place of work within the next month, this has increased from 11% in early September 2021. The manufacturing industry and the professional, scientific and technical activities industry reported 8% respectively, that they expect their workforce to return to their normal place of work within the next month.

In contrast, the information and communication industry reported 22% of businesses do not expect their workforce to return to their normal place of work, an increase from 13% in early September 2021.

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

• two-thirds (66%) expect above 75% of the workforce to return to their normal place of work

• 15% expect between 50% and 75% of the workforce to return

• 13% expect between 25% and 49% of the workforce to return

• 2% expect less than 25% of their workforce to return

• 3% 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 reasons reported by businesses who indicated they planned to use an increased homeworking model going forward were:​

• improved staff wellbeing – 63%​

• reduced overheads – 49%​

• increased productivity – 45%​

• reduced carbon emissions – 34%

• ability to recruit from a wider geographical pool in the UK – 22%

• ability to better match jobs to skills – 15%

• reduced sickness absence – 13%

• ability to recruit from a wider geographical pool internationally – 13%

• reduced wage bill – 4%

While 8% of businesses were not sure if they would use a homeworking model.

The top three reasons reported by businesses who indicated they did not plan to use an increased homeworking model were:​

• not suitable for our business - 89%​

• reduced communication – 6%​

• reduced productivity – 6%

Businesses in the accommodation and food service activities industry and the manufacturing industry reported that an increased homeworking model was not suitable for their businesses at 99% and 98%, respectively.

Of currently trading businesses, 10% had exported and 9% 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 two weeks.

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

Notes:

1. Final weighted results, Wave 12 to Wave 41 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.
2. 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 two weeks” have been combined.
3. Caution should be taken when interpreting these results based on the specific routing of this question meaning that only a small number of businesses responded.
4. Businesses were asked for their experiences for the reference period for each wave, however, for questions regarding the last two weeks, businesses may respond from the point of completion of the questionnaire.
5. 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.

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The proportion of currently trading businesses that experienced a challenge in exporting or importing, was 52% and 60% respectively. This has remained broadly stable since a large increase in January 2021. The data suggests businesses are continuing to be more likely to experience an importing challenge than an exporting one.

Additional paperwork and transportation costs remain the top challenges for both exporting and importing, and the proportion of currently trading businesses experiencing these challenges has remained broadly stable since early May 2021.

Of currently trading businesses that reported how their importing had been affected, 22% reported lack of hauliers to transport goods or lack of logistics equipment as a challenge, in late September 2021, up from 11% in late April 2021. A lack of hauliers was particularly prevalent in the accommodation and food service activities industry with 64% of businesses in this industry reporting it as a challenge, up from 7% in late April 2021.

Questions from BICS relating to supply chains are not asked every Wave and are covered in detail in our Wave 39 bulletin, published 23 September 2021 and will next be covered in our Wave 42 publication (4 November 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.

Businesses not permanently stopped trading were asked if their business had taken any actions to reduce their carbon emissions, and if anything had prevented any such actions being taken.

Of businesses not permanently stopped trading approximately 37% reported taking at least one action to reduce their carbon emissions, with 28% reporting they have no emissions, 22% reporting that no action had been taken, and the remaining businesses reporting not sure.

The arts, entertainment and recreation industry and the professional, scientific and technical activities industry reported the largest percentages of having no carbon emissions at 47% and 38%, respectively.

Of the actions taken to reduce carbon emissions, 27% of businesses not permanently stopped trading reported they had switched to using LED bulbs; with the accommodation and food service activities industry reporting the largest percentage at 47%. Also, 17% reported they had adjusted heating and cooling systems; the education industry and the real estate industry reported the highest proportion of businesses adjusting their heating and cooling systems, at 34%.

Table 1 shows the percentage of those businesses stating that specific aspects have prevented taking actions to reduce carbon emissions.

Notes:

1. Final weighted results Wave 41 of the Office for National Statistics’ (ONS’) Business Insights and Conditions Survey (BICS); businesses not stopped trading.
2. Table will not sum to 100% because businesses could select multiple options, and only top four reasons are presented for presentational purposes.

Among not permanently stopped trading businesses that reported having carbon emissions (including those not sure), nearly a third (32%) also reported there was nothing preventing them from reducing their carbon emissions.

Those businesses were also asked which methods had been used to assess the impact of climate change on their ability to operate; businesses responded:

• not conducted any assessments (70%) with the art, entertainment and recreation industry reporting the highest proportion (90%)

• not sure (24%) with the other service activities industry reporting the highest proportion (36%)

• assessment of demand for goods or services (3%) with the other service activities industry reporting the highest proportion (13%)

• technological assessment (2%) with the other service activities reporting the highest proportion (7%)

• flooding risk assessment (1%) with the other service activities industry reporting the highest proportion (7%)

• resource efficiency assessment (1%) with the real estate activities reporting the highest proportion (5%)

• assessment of finance, investments or insurance (1%) with the transportation and storage industry reporting the highest proportion (4%)

Further breakdowns including industry and all other options for carbon emissions questions are available in the accompanying dataset.

Coronavirus

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

COVID-19

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

EU exit 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.

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 20 May 2021.

The BICS is voluntary, and the results are experimental.

Notes:

1. Response rates for all waves can be found 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 41 survey was live for the period 4 October to 17 October 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 20 September to 4 October 2021. The survey questions are available.

Coverage

The Monthly Business Survey (MBS) covers the UK for production and only Great Britain for services. The 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.