Business insights and impact on the UK economy: 23 March 2023

• Latest results suggest business conditions remain challenging, but estimates show small signs of positive improvement for some measures; examples include, a smaller proportion of businesses reporting lower turnover and reporting higher prices for goods or services bought, however, it is too early to know if this is the start of a longer-term change in conditions.

• In February 2023, a quarter (25%) of trading businesses reported their turnover was lower compared with January 2023, while 16% reported their turnover was higher; therefore, a net 9% of businesses reported their turnover decreased, this is up from a negative net position of 13% in January 2023.

• More than one in five (22%) trading businesses expect turnover to increase in April 2023, while 12% of businesses expect turnover to decrease; the net 9% of businesses expecting turnover to increase is the highest net position since the question was first asked in April 2022.

• More than a third (37%) of trading businesses reported an increase in the prices of goods or services bought in February 2023 compared with January 2023; this proportion has been falling since the first time the question was asked in March 2022 (50%).

• Just over half (54%) of trading businesses expect the prices of goods or services they sell to stay the same in April 2023, while nearly a quarter (24%) of trading businesses expect to raise their prices.

• Over two-thirds (68%) of trading businesses reported their overall performance had stayed the same or improved in February 2023 compared with February 2022; 18% of those reported their performance had increased.

The data presented in this bulletin are the results from Wave 78 of the Business Insights and Conditions Survey (BICS), which was live from 6 to 19 March 2023.

The data reported within BICS bulletins and datasets are estimates that are subject to uncertainty, such as sampling variability and non-sampling error. Further information on quality is available in our Business Insights and Conditions Survey Quality and Methodology Information (QMI) report, and we regularly update the confidence intervals associated with the survey questions.

Experimental single-site weighted regional estimates up to Wave 74 are available in our Business insights and impact on the UK subnational single-site economy: February 2023 article.

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

Notes:

1. For presentational purposes, some response options have been combined and/or excluded.
2. Prices: for presentational purposes, the data show an increase to prices bought and sold compared with the previous calendar month.
3. Data are plotted in the middle of each wave.

Download the data

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In early March 2023, the percentage of businesses that reported that they were trading was 95%, with 86% fully trading and 9% partially trading (for example, trading with reduced hours or staff numbers). Meanwhile, 3% of businesses reported "temporarily paused trading" and 2% "permanently ceased trading" as their business's trading status.

Turnover

Trading businesses were asked how their turnover in February 2023 compared with January 2023.

When asked in mid-January 2023 about their expectations for turnover in February 2023, 17% of trading businesses reported they expected their turnover to decrease. When asked in early-March 2023, a higher proportion of businesses said they experienced a decrease in turnover for February 2023, with 25% of trading businesses reporting a fall, down 4 percentage points when comparing against January 2023 to December 2022.

In the same period, 14% of trading businesses reported they expected their turnover to increase in February 2023, with the actual data collected in early March 2023, suggesting 16% of businesses reported their turnover increased.

Turnover expectations

Trading businesses were asked about their turnover expectations for April 2023, excluding any seasonality trading.

More than one in five (22%) trading businesses expect turnover to increase in April 2023, the highest percentage reported since the question was introduced in April 2022. The data also suggest that a smaller number of trading businesses are expecting a fall in turnover for April 2023, with 12% reporting they expect turnover to decrease. This is the lowest percentage reported since the question was introduced in April 2022.

Prices bought and sold

Businesses not permanently stopped trading were asked how the prices of goods or services bought and/or sold by their business in February 2023 compared with the previous calendar month.

In February 2023, 37% of trading businesses reported the prices of goods or services bought had increased compared with the previous month. This compares with 39% of businesses who reported an increase in the prices of goods or services bought in January 2023, and 41% in December 2022.

This suggests businesses are continuing to experience increases in prices bought month on month, however the proportion has been falling steadily since September 2022 (48%).

The proportion of businesses that reported their prices of goods or services bought stayed the same increased by 11 percentage points from 31% in September 2022, to 42% in February 2023.

Price expectations

Trading businesses were asked what their expectations are for the prices of goods or services they sell in April 2023.

Of those businesses who are considering raising prices, energy prices continued to be reported as the most common reason for doing so, at 36% for businesses of all sizes and 46% for businesses with 10 or more employees. In contrast, more than a third (37%) of businesses of all sizes were not considering raising their prices.

Trading businesses in the accommodation and food service activities industry reported the largest proportion of businesses who expect their prices of goods or services they sell to increase in April 2023, at 46%, up from 45% in March 2023.

Businesses in the other service activities industry reported the largest rise in the proportion of businesses expecting their prices to increase in April 2023, up 6 percentage points to 25%.

Price rises

In early March 2023, businesses not permanently stopped trading were asked in which ways, if any, had they been affected by price rises.

Nearly two-thirds (62%) of businesses reported they had been affected in some way. The most commonly reported effects were:

• having to absorb costs (41%)
• having to pass on price increases to customers (27%)
• having to change suppliers (12%)

Further response options on prices questions broken down by industry and size band can be found in our accompanying dataset.

Performance

Businesses not permanently stopped trading were asked how they would describe their business’s overall performance such as pricing, trading and workforce in February 2023, compared with February 2022.

One in five (20%) businesses reported their overall performance including pricing, trading and workforce had decreased in February 2023 compared with February 2022, broadly stable with January 2023 compared with January 2022.

More businesses were optimistic about their performance expectations over the next 12 months; 11 of the Business Insights and Conditions Survey (BICS) sampled industries reported a higher percentage for performance will increase, than the percentage that reported performance will decrease.

Businesses at all industry level reported:

• 24% expect performance to increase
• 45% expect performance to stay the same
• 12% expect performance to decrease
• 19% are not sure

In February 2023, 13% of businesses not permanently stopped trading with 10 or more employees reported that the number of employees at their business had increased.

In the same period, approximately 3 in 10 (29%) businesses of this size were also experiencing difficulties while recruiting. Both these percentages were broadly stable with January 2023.

Further details including the full list of concerns broken down by industry and size band are available in our accompanying dataset.

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.

Net balance

Net balance is the difference between the percentage of businesses that reported a decrease and the percentage of businesses that reported an increase.

More quality and methodology information (QMI) on strengths, limitations, appropriate uses, and how the data were created is available in our Business Insights and Conditions Survey (BICS) QMI, updated on 24 January 2022.

The BICS is voluntary, and the results are experimental. More information is available in our Guide to experimental statistics.

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 78 survey was live for the period 6 to 19 March 2023. The BICS survey questions are available.

Coverage

The Monthly Business Survey (MBS) covers the UK for production and Great Britain (GB) only for services. The Retail Sales Index (RSI) and construction are GB-focused. Therefore, the BICS will be UK-focused for production-based industries but GB-focused for the other elements of the economy covered. The sectors 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
• oil and gas extraction
• energy generation and supply
• public administration and defence
• public provision of education and health
• finance and insurance

For more information on the methodology of producing the BICS, such as weighting, please see our BICS QMI report.

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