Business insights and impact on the UK economy: 6 October 2022

• In late September 2022, of businesses who reported on the frequency that they pay their energy bills, 34% reported they have fixed or hedged electricity contacts, this percentage was 29% for gas; of these, 18% are expecting their electricity bills to increase by more than 300% at the end of their contract, and 17% expect the same for their gas bills.

• In late September 2022, 42% of businesses not permanently stopped trading reported they had not passed on their higher costs to customers, with businesses in the professional, scientific and technical activities industry reporting the highest proportion, at 66%.

• For October 2022, input price inflation and energy prices continue to remain the top two concerns reported by businesses, at 24% and 23%, respectively.

• In late September 2022, of not permanently stopped trading businesses, nearly half (46%) reported they were not concerned about the impact climate change may have on their business.

• In August 2022, 18% of businesses with 10 or more employees reported experiencing global supply chain disruption, with 34% of those businesses reporting a shortage of materials as the main reason for the disruption.

The data presented in this bulletin are the final results from Wave 66 of the Business Insights and Conditions Survey (BICS), which was live from 20 September to 2 October 2022. Approximately two-thirds of the responses to the survey were provided prior to the chancellor of the exchequer's fiscal statement on 23 September 2022, whereas the remaining third were provided after the announcement had been made.

Experimental single-site weighted regional estimates up to Wave 60 (27 June to 10 July 2022) are available in our Business insights and impact on the UK subnational single-site economy: July 2022 article.

In Wave 66, for specific questions, businesses were asked to reflect on their experiences in August 2022. This is the same reference period asked for in Wave 64. Any differences seen between the two waves are because of sampling variation, changes in opinions, and responses from businesses being asked the same questions during a later two-week period.

Please note that businesses were asked to exclude seasonal changes when answering questions contained within BICS.

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

Notes:

1. For presentational purposes, some response options have been excluded.
2. Data are plotted in the middle of each wave.
3. Intra UK procurement: because of an overlap in reference periods, Wave 64 has been removed.

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In late September 2022, the percentage of businesses that reported they were trading was 94%, with 86% fully trading and 8% partially trading (for example, trading with reduced hours or staff numbers). Meanwhile, 5% of businesses reported "temporarily paused trading" and 1% "permanently ceased trading" as their business's trading status.

The data presented in this section are the final results from Wave 66 of the Business Insights and Conditions Survey (BICS), which was live from 20 September to 2 October 2022. The majority of responses to the survey were provided prior to the chancellor of the exchequer’s fiscal statement on 23 September 2022.

Businesses not permanently stopped trading were asked what their main concern for their business is looking ahead to October 2022.

More than two-thirds (70%) of businesses reported they had some form of concern for their business for October 2022, with this percentage rising to 83% for businesses with 10 or more employees. The accommodation and food service activities industry had the highest proportion of all size businesses reporting some form of concern, at 90%.

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

Businesses not permanently stopped trading reported on the frequency that their bills are paid. This represented 61% of businesses for electricity and 42% for gas.

Of businesses who pay their bills on a regular basis, 34% reported they have fixed or hedged electricity contracts. This percentage was 29% for gas contracts.

Approximately 7 in 10 of these businesses expect to see some form of increase following the expiration of their contacts (72% for electricity and 70% for gas). In contrast, 29% of businesses reported their energy usage is currently on a variable plan for both energy forms

Further details broken down by industry and size band are available in our accompanying dataset.

In late September 2022, businesses not permanently stopped trading were asked to what extent they had already passed through higher costs to prices. This refers to changes in the prices of goods or services following an increase in the costs it incurred producing them.

More than a quarter (27%) of businesses reported that they had passed on less than 50% of their higher costs to customers, while 11% reported that they had passed on 50% or more.

In late September 2022, the proportion of businesses who reported that they had already passed on higher costs to customers were:

• more than 75% of cost increases – 5% of businesses passing on costs
• between 50% and 74% – 5%
• between 25% and 49% – 10%
• less than 24% – 17%

The wholesale and retail trade; repair of motor vehicles and motorcycles industry reported the highest proportion of businesses who have passed on more than 75% of their higher costs, at 11%.

In contrast, the human health and social work activities industry (private sector businesses only) reported the highest proportion of businesses who had passed on less than 24%, at 31%.

Businesses commented that they were reluctant to pass higher costs onto customers because of concerns about customers having less disposable income, and fears that competitors will undercut them.

Climate change

In late September 2022, businesses were asked if they were concerned about the impact climate change may have on their business.

The human health and social work activities industry (private sector businesses only) saw the highest proportion of businesses reporting that they were not concerned about the impact climate change may have on their business, at 58%.

In contrast, half (50%) of businesses in the transportation and storage industry reported they had some level of concern about climate change on their business.

Carbon emissions

Businesses not permanently stopped trading were also asked what actions, if any, they had taken to reduce their business’s carbon emissions.

In late September 2022, more than half (56%) of businesses reported they had taken one or more actions to reduce their carbon emissions. For businesses with 10 or more employees, this percentage was higher, at 72%. Both of these percentages are up from late June 2022, by 7 percentage points and 6 percentage points, respectively.

The other service activities industry, which includes hairdressing and other beauty treatments, reported the largest proportion of businesses of all sizes who had taken some form of action, at 70%.

The proportion of businesses who reported they were going paperless to reduce their carbon emissions saw the largest increase in percentage. This proportion of businesses selecting this response option in late September 2022 was 29%, up 6 percentage points from late June 2022.

Further details including all response options broken down by industry and size band are available in our accompanying dataset.

Businesses not permanently stopped trading were asked whether their business experienced any global supply chain disruption in August 2022.

In late September 2022, nearly one in five (18%) businesses not permanently stopped trading with 10 or more employees reported they were experiencing global supply chain disruption. This is the lowest percentage reported since the question was introduced in December 2021.

The industry reporting the largest decrease in businesses reporting that they had experienced disruption was the construction industry. Approximately 1 in 10 (12%) businesses reported this, down 8 percentage points from July 2022.

Of businesses with 10 or more employees who reported they were experiencing global supply chain disruption, shortage of materials was reported as having the biggest effect on businesses, at 34%.

Of currently trading businesses with 10 or more employees, 18% had exported and 24% imported in the last 12 months.

Those businesses who had exported and/or imported were asked how their exporting and importing in August 2022 compared with August 2021, and what challenges they had faced compared with the previous calendar month.

Figure 7: Exporting and importing figures from the Business Insights and Conditions Survey

Notes:

1. Exporting or importing compared with the same month last year: percentage of businesses currently trading with 10 or more employees and had reported they had exported or imported in the last year. For presentational purposes, response options have been combined.

2. Exporting or importing challenges: percentage of businesses currently trading with 10 or more employees, reported they had exported or imported in the last year, and reported how their exports and imports were affected. Businesses may report that exporting and importing has not been affected but are still able to report challenges.

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. Data are plotted in the middle of the period of each wave.

5. Because of an overlap in reference periods, Wave 64 data has been removed.

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Further industry and size band breakdowns for all exporting and importing questions are available in our accompanying dataset.

Access to microdata

You can access the BICS microdata for Waves 1 to 65 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.

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 who reported a decrease, and the percentage of businesses who 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 66 survey was live for the period 20 September to 2 October 2022. 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 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 BICS, such as weighting, please see our BICS quality and methodology information.

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.