Business insights and impact on the UK economy: 23 September 2021

• The proportion of businesses currently trading has remained broadly stable since June 2021 and reached 90% in early September 2021, while the proportion of currently trading businesses whose turnover has not been affected compared to normal expectations has continued to steadily increase, to a high of 53% in late August 2021.

• The proportion of businesses’ workforce reported to be on full or partial furlough remained broadly unchanged throughout August 2021 at 6% (representing a provisional approximate range of between 1.3 to 1.7 million people).

• In early September 2021, 2% of all businesses not permanently stopped trading expect to make some redundancies in the next three months; in the other service activities industry (covering the hairdressing and other beauty treatment industry), 16% of employees were on furlough and 20% of employers in that industry expect to make some of their workforce redundant in the next three months.

• Of businesses not permanently stopped trading, 6% expect employees to return to their normal place of work in the next month; 4% of businesses do not expect their employees to return to their normal place of work at all, with the percentage being highest (13%) in the information and communications industry.

• Among businesses where employees are expected to return to their normal place of work, 52% said the main considerations on deciding who should return were both business need and employee preference, whereas 32% stated business need only.

• In late August 2021, almost one in five businesses were either not able to get the materials, goods or services they needed from within the UK, or changed suppliers or found alternative solutions to do so; the percentage was highest in the construction industry (36%).

• There has been an ongoing fall in the proportion of businesses saying they have not been able to import or have imported less than normal, although more than 60% of importing businesses continue to state that they have faced challenges importing.

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 here are final results from Wave 39 of the Business Insights and Conditions Survey (BICS), which was live for the period 6 September to 19 September 2021.

For questions regarding the last two weeks, businesses were asked for their experience for the reference period 23 August to 5 September 2021.

These dates should be kept in mind in relation to the easing of coronavirus (COVID-19) restrictions. In England all closed sectors of the economy opened in June 2021, but some regional variations across the UK still apply. Dependent on the location and date when the business responded, the easing of restrictions could have had an impact on the estimates.

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 39 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.

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 38 is not available as the question was rotated out of the questionnaire and so it is compared with Wave 37.

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”, "On sick leave or not working due to coronavirus (COVID-19), self-isolation or quarantine" and “Other” have been removed. From Wave 33, the response options for this question were updated but this 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 90% in early September 2021. This figure has remained broadly stable since late June 2021, following an increase from 71% in January 2021.

Businesses currently trading were asked how their turnover compared with normal expectations for this time of year. The survey found:

• 26% of businesses reported a decrease in turnover compared with normal expectations for this time of year, down from 28% two weeks earlier
• 6% of businesses reported an increase in turnover compared with normal expectations for this time of year, broadly unchanged from two weeks earlier
• 53% of businesses reported no effect to turnover compared with normal expectations for this time of year, up from 51% two weeks earlier

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)) remained unchanged throughout August 2021 at 6% (representing a provisional approximate range of between 5% to 7% of businesses’ workforce).

The estimated 6% of businesses’ workforce reported to be on full or partial furlough leave in late August 2021 suggests that approximately 1.3 to 1.7 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 2% of the workforce (approximately 0.3 to 0.8 million people) reported to be fully furloughed. The furlough scheme is set to end on 30 September 2021.

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 July 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

The transportation and storage industry had the lowest percentage of businesses currently trading in early September 2021, at 80%. The high percentage of paused and permanently ceased traders is partly driven by the freight transport by road industry and the unlicensed carriers industry. This industry has been widely reported as experiencing a shortage of lorry drivers.

The administrative and support service activities industry had the second lowest proportion of businesses currently trading, at 84% in early September 2021, and is broadly unchanged from late August 2021.

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. It does not cover whether a business has completely reopened to trading at full capacity, as experienced before the coronavirus (COVID-19) pandemic or if the business is operating at a reduced level of capacity but is still trading.

Financial performance

In late August 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 August 2021. The information and communication industry reported the largest percentage reporting no effect on turnover, at 74% in late August 2021, which has increased from 58% in late July 2021. This was followed by the water supply; sewerage, waste management and remediation activities industry, real estate activities industry and the human health and social work activities industry at 70%, 65% and 64% respectively.

Workforce

Approximately one in six (16%) of the workforce in the other service activities industry (which includes hairdressing and other beauty treatment businesses) were reported to be on partial or full furlough leave. This has remained broadly stable in recent weeks but has declined from a high of 79% in late January 2021. The arts, entertainment, and recreation industry reported 10% but all other industries reported fewer than 10% of the workforce on furlough leave in late August 2021.

In late August 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.

In response to being asked "does your business expect to make any of your workforce redundant over the next three months?", approximately 2% of businesses not permanently stopped trading responded "yes" in early September 2021. The top three industries reporting expected redundancies over the next three months were:

• the other service activities industry at 20%
• the human health and social work activities industry at 4%
• the administrative and support service activities industry at 3%

In comparison, 19% responded “not sure”, and of those businesses who responded not sure, the transportation and storage industry, the accommodation and food service activities industry and the wholesale and retail trade; repair of motor vehicles and motorcycles industry reported the highest percentages, at 39%, 24% and 23% respectively.

Of currently trading businesses, 10% had exported and 12% 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 6: Exporting and importing figures from the Business Insights and Conditions Survey

Notes:

1. Final weighted results, Wave 12 to Wave 39 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 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.

4. Exporting or importing challenges: Percentage of businesses currently trading, reported they had exported/imported in the last year, and reported how their exports/imports were affected. Businesses may report that exporting/importing has not been affected but are still able to report challenges.

5. 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.

6. 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.

7. 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 importing or exporting has remained broadly stable since a large increase in January 2021. There has been an ongoing fall in the proportion of businesses saying they have not been able to import or have imported less than normal, although more than 60% of importing businesses continue to state that they have faced challenges importing. The data suggests businesses are more likely to be experiencing an importing challenge than an exporting one.

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

Further industry, size band and breakdowns of trade questions by what they are exporting or importing (goods, services or both) are available in the accompanying dataset.

Businesses not permanently ceased trading were asked if they were able to get the materials, goods or services they needed from within the UK in the last two weeks.

Across all industries, 10% reported they were able to get the materials, goods or services they needed, but had to change suppliers or find alternative solutions to do so. This is up from 8% in early July 2021. The construction industry reported the largest percentage at 28%, an increase from 15% in early August 2021. This was followed by the accommodation and food service activities industry and the manufacturing industry at 16% and 12%, respectively.

Across all industries, 8% reported they were not able to get the materials, goods or services needed, this has remained broadly stable from early August 2021. The other service activities industry reported the largest percentage at 20%, followed by the wholesale and retail trade; repair of motor vehicles and motorcycles industry at 13%.

In contrast, across all industries, 34% of businesses reported they were able to get the materials, goods or services they needed in late August 2021 without having to change supplier. The remaining businesses reported that supply chains were not applicable. Industries such as information and communication and education (private sector and higher education businesses only), which have a higher proportion of businesses reporting not applicable, are included in the headline figures. Also, businesses who have paused trading and respond to this question are more likely to select not applicable.

Overall, the construction industry was the top industry experiencing a change or disruption with supply chains, with 36% of businesses not permanently stopped trading reporting they either were not able to get the materials, goods or services they needed from within the UK, or had to change suppliers or find alternative solutions to do so.

Businesses not permanently stopped trading were also asked how their stock levels for the last two weeks compared with normal expectations for this time of year.

Of businesses not permanently stopped trading, 5% reported that stock levels were higher than normal, while 11% reported that stock levels were lower than normal. Almost one in four businesses (24%) reported that stock levels had not changed while the remainder either reported not sure or not applicable. These figures have remained stable since late December 2021.

The accommodation and food service activities industry reported the largest percentage of businesses that indicated stock levels were lower than normal at 30%, followed by the wholesale and retail trade; repair of motor vehicles and motorcycles industry at 23%.

The accommodation and food service activities industry also reported 27% of businesses experiencing supply chain changes or disruptions, and that the main reason for their changes in stock levels was the coronavirus (COVID-19) pandemic. In recent media, there have been reports of some businesses within the accommodation and food service activities industry experiencing supply shortages.

For full industry breakdowns and further data surrounding the continuation of supply chains and stock levels, see the accompanying dataset.

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 one-third of businesses reported their workforce have already returned to their normal place of work and many others are not sure or were not impacted. Expectations among businesses that gave an opinion on future return to normal place of work are shown in Figure 7.

In early September 2021, businesses within the other service activities industry and the manufacturing industry reported 20% and 14%, respectively, that they expect their workforce to return to their normal place of work within the next month. Whereas the transportation and storage industry reported 16% of businesses expect their workforce to return in more than six months' time.

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:

• More than half (57%) expect above 75% of the workforce to return to their normal place of work - for businesses who expect their workforce to return within the next month, this rose to 70%
• 21% expect between 50 and 75% of the workforce to return
• 7% expect between 25 and 49% of the workforce to return
• 6% expect less than 25 of their workforce to return
• 8% reported they were not sure

Across all businesses not permanently stopped trading (that selected a timeframe for workforce to return to their normal place of work), the main considerations reported for deciding who should return were:

• both business need and employee preference (52%) with the other service activities industry reporting the highest percentage (96%)
• business need only (32%) with the accommodation and food service activities industry reporting the highest percentage (54%)

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

Access to microdata

The BICS microdata for Waves 1 to 38 can now be accessed through the Secure Research Service (SRS). The BICS microdata for each wave are released on a rolling basis in the week following the publication of each wave.

The microdata are made confidential and do not disclose information on 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 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.

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 39 survey was live for the period 6 September to 19 September 2021. For questions regarding the last two weeks, businesses were asked for their experience for the reference period 23 August to 5 September 2021. The survey questions are available.

Please note, as part of our regular and ongoing quality assessment of our methods we recently introduced improved methods to the weighting of smaller businesses within the Business Insights and Conditions Survey (BICS) sample where we use employment and turnover to do so (first published 26 August 2021). In the main, previous findings remained unaffected, there were, however, revisions to estimates for certain variables, including turnover, business resilience and proportion on full or partial furlough.

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.