Coronavirus and the economic impacts on the UK: 10 September 2020

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

• Coronavirus and the latest indicators for the UK economy and society: 10 September 2020
• Coronavirus and the social impacts on Great Britain: 4 September 2020

• Of businesses not permanently stopped trading, 36% of the workforce were working remotely instead of at their normal place of work.
• Across all industries, 6% of the workforce that were still on partial or furlough leave returned from leave in the last two weeks.
• The accommodation and food service activities industry reported the highest percentage of businesses reporting their risk of insolvency was severe to moderate, at 23%, compared with 11% across all industries.
• The arts, entertainment and recreation industry reported the largest percentage of businesses indicating that operating costs had exceeded turnover, at 40%.
• The arts, entertainment and recreation industry had the highest percentage of businesses reporting they had issued credit notes or vouchers to customers for postponed or cancelled bookings, services or events, at 52%.
• Of businesses not permanently stopped trading, 53% reported having outstanding invoice payments due to them.

Final results from Wave 12 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) are for the period 10 August to 23 August 2020, which closed on 6 September 2020.

For presentational purposes:

• currently trading and has been for more than the last two weeks, and started trading within the last two weeks after a pause in trading have been combined to currently trading
• paused trading but intends to restart in the next two weeks, and paused trading and does not intend to restart in the next two weeks have been combined to temporarily closed or paused trading

The breakdowns of these categories are available in the detailed dataset in Section 10.

Across all industries, of responding businesses:

• 95% had been trading for more than the last two weeks
• 1% had started trading within the last two weeks after a pause in trading
• 1% had paused trading but intends to restart in the next two weeks
• 3% had paused trading and does not intend to restart in the next two weeks

A small number of businesses (less than 1%) also responded that they had permanently ceased trading in the period that the survey was live – 24 August to 6 September 2020.

Only one industry had less than 90% of their businesses reporting that they were currently trading. This was the arts, entertainment and recreation industry, at 79%.

Businesses that had not permanently stopped trading were also asked if they intended to permanently close any of their business sites in the next three months.

Across all industries, of businesses not permanently stopped trading:

• 4% intended to permanently close business sites in the next three months
• 86% did not intended to permanently close business sites in the next three months

The wholesale and retail trade industry, and the accommodation and food service activities industry reported the highest percentages of businesses indicating that they were intending to permanently close business sites in the next three months, both at 6%. The was followed by the arts, entertainment and recreation industry, and the transportation and storage industry, both at 5%.

Of the businesses that indicated they were intending to close business sites in the next three months, 66% expect closing these sites to affect their business’s workforce through permanent redundancies; 32% expect the workforce to relocate and 15% expect the workforce to move to remote working. Other effects on the workforce and industry breakdowns are available in the detailed dataset in Section 10.

For presentational purposes, increased turnover categories and decreased turnover categories have been combined. The breakdowns of these categories are available in the detailed dataset in Section 10.

Across all industries, of businesses currently trading:

• 47% reported their turnover had decreased compared with what is normally expected for this time of year
• 34% reported their turnover had been unaffected
• 13% reported their turnover had increased compared with what is normally expected for this time of year

Of businesses currently trading, the arts, entertainment and recreation industry had the highest percentage of businesses reporting their turnover had decreased, at 74%. This was followed by the education industry (private sector and higher education businesses only), and the accommodation and food service activities industry, at 59% and 58% respectively.

Conversely, of businesses currently trading, the wholesale and retail trade industry had the highest percentage of businesses reporting that their turnover had increased, at 21%. Additional information on the wholesale and retail trade industry is available in the Retail Sales July 2020 publication.

In Scotland, 51% of businesses reported a decrease in turnover, compared with 49% in Wales, 47% in England, and 45% in Northern Ireland. Of these regions, 18% of businesses in Wales reported an increase in turnover, compared with 14% in Scotland, 13% in England, and 12% in Northern Ireland.

The North East and London were the regions within England that had the highest percentages of businesses reporting their turnover had decreased, at 52% and 51% respectively. Conversely, the West Midlands and the East Midlands had the highest percentages of businesses reporting their turnover had increased, at 17% and 16% respectively.

Businesses were also asked about the impact on operating costs relative to their business turnover. For presentational purposes, turnover categories and operating costs categories have been combined. The breakdowns of these categories are available in the detailed dataset in Section 10.

Across all industries, of businesses currently trading:

• 15% reported that operating costs exceeded turnover
• 12% reported that operating costs were equal to turnover
• 49% reported that turnover exceeded operating costs

The arts, entertainment and recreation industry, and the education industry (private sector and higher education businesses only) reported the highest percentages of businesses indicating that operating costs had exceeded turnover, at 40% and 29% respectively.

Conversely, the manufacturing industry, the water supply, sewerage, waste management and remediation activities industry, and the wholesale and retail trade industry reported the highest percentages of businesses indicating that turnover had exceeded operating costs, at 58%, 57% and 56% respectively.

Surveyed businesses who have not permanently stopped trading will have differing approaches to the management of employees, whether furloughing staff, working as normal, or other scenarios. Because of the complex nature of this, the data in this section primarily focus on proportions of the workforce within responding businesses as opposed to proportion of businesses as is the case for other sections.

The workforce proportions are based on the responses provided by businesses. These are then apportioned to derive proportions of employees in those businesses using the employment recorded for each reporting unit on the Inter-Departmental Business Register (IDBR). This apportionment of workforce methodology used for these data does not involve grossing to make a UK-wide estimation, therefore, the findings should not be treated as representative of the UK workforce.

Across all industries, of businesses not permanently stopped trading (apportioned by employment size):

• 11% of the workforce were on partial or furlough leave
• 36% of the workforce were working remotely instead of at their normal place of work
• 49% of the workforce were working at their normal place of work

The arts, entertainment and recreation industry had the highest proportion of their workforce on partial leave or on furlough leave under the terms of the UK Government’s Coronavirus Job Retention Scheme (CJRS), at 41%. This was followed by the accommodation and food service activities industry, and the administrative and support service activities industry, at 29% and 18% respectively.

When apportioned by workforce size, less than 1% of the workforce had been made permanently redundant across all industries.

Additional breakdowns of working arrangements are available in the detailed dataset in Section 10.

For a more detailed outline of ‘Other’ working arrangements across waves, please see the Coronavirus and the experiences of UK businesses, textual analysis: March 2020 to July 2020 article, which outlines how these ‘Other’ working arrangements have changed over Waves 2 to 9.

When interpreting the proportion of the workforce estimates returning from furlough leave or from remote working in the last two weeks, consideration of the industries that had a higher proportion of their workforce furloughed is needed. For example, while the human health and social work activities industry (private sector businesses only) reported 25% of their workforce returning from furlough in the last two weeks, the total proportion of the workforce on furlough was 4%, compared with 41% in the arts, entertainment and recreation industry.

Across all industries, of businesses currently trading:

• 6% of the workforce had returned from partial or furlough leave in the last two weeks
• 3% of the workforce had returned from remote working to the normal workplace in the last two weeks

The following section presents percentages relative to all businesses who have not permanently stopped trading.

Figure 8: Of businesses not permanently stopped trading, 77% applied for the CJRS while 97% received it

Government schemes estimates from the Business Impact of Coronavirus (COVID-19) Survey, 10 August to 23 August 2020, UK

Notes:

1. Final results, Wave 12 of the Office for National Statistics (ONS) Business Impact of Coronavirus (COVID-19) Survey; businesses who have not permanently stopped trading.
2. Bars may not sum to 100% because of rounding, percentages less than 1% being removed for disclosure purposes, and businesses could select multiple schemes.
3. All percentages are a proportion of businesses that have not having permanently stopped trading apart from government schemes received, which is a proportion of those that have not permanently stopped trading and applied for the Coronavirus Job Retention Scheme (CJRS) and/or government-backed accredited loans or finance agreements.
4. Businesses were asked for their experiences for the reference period 10 August to 23 August 2020. However, for questions regarding government schemes, businesses may respond from the point of completion of the questionnaire (24 August to 6 September 2020).

Download the data

The accommodation and food service activities industry reported the highest percentage of businesses applying for the Coronavirus Job Retention Scheme (CJRS), at 95%. This was followed by the arts, entertainment and recreation industry, and the transportation and storage industry, both at 85%.

Across all industries, 97% of businesses that applied for the CJRS received it.

Meanwhile, the human health and social work activities industry (private sector businesses only), and the information and communication industry reported the highest percentages of businesses that had not applied for any of these schemes, at 51% and 46% respectively.

The accommodation and food service activities industry had the highest percentage of businesses using the business rates holiday (74%), deferring Value Added Tax (VAT) payments (74%), and using the HM Revenue and Customs (HMRC) Time to Pay scheme (27%) initiatives.

Further breakdown by industry and by region of government schemes and initiatives can be found in the detailed dataset in Section 10.

HMRC also publishes cumulative estimates on Coronavirus (COVID-19) statistics, looking at data on the CJRS, the Self-Employment Income Support Scheme (SEISS) and the VAT payments deferral scheme.

For presentational purposes, cash reserve categories between zero and three months have been combined. The breakdowns of these categories are available in the detailed dataset in Section 10.

Across all industries, of businesses not permanently stopped trading:

• 4% had no cash reserves
• 24% had less than three months’ cash reserves
• 17% had between four and six months’ cash reserves
• 35% had more than six months’ cash reserves

The accommodation and food service activities industry, and the construction industry had the highest percentages of businesses indicating they had no cash reserves, at 8% and 6% respectively.

Conversely, the education industry (private sector and higher education businesses only), and the information and communication industry reported the highest percentages of businesses indicating they had cash reserves to last more than six months, at 52% and 47% respectively.

Businesses who had not permanently stopped trading were also asked about their risk of insolvency.

Across all industries, of businesses not permanently stopped trading:

• 1% had a severe risk of insolvency
• 9% had a moderate risk of insolvency
• 48% had a low risk of insolvency
• 30% had no risk of insolvency

The arts, entertainment and recreation industry, the human health and social work activities industry (private sector businesses only), the administrative and support service activities industry, the accommodation and food service activities industry, and the information and communication industry all had the highest percentages of businesses indicating they had a severe risk of insolvency, at 3%.

Conversely, the water supply, sewerage, waste management, and remediation activities industry reported the highest percentage of businesses indicating they had no risk of insolvency, at 51%.

Businesses currently trading were asked how the coronavirus (COVID-19) pandemic had affected customer interest in their goods and services, compared with normal expectations for this time of year.

Across all industries, of businesses currently trading:

• 24% reported customer interest had decreased
• 39% reported customer interest had stayed the same
• 12% reported customer interest had increased

The arts, entertainment and recreation industry had the highest percentage of businesses reporting customer interest had decreased, at 46%. This was followed by the accommodation and food service activities industry, and the administrative support service activities industry, at 37% and 34% respectively.

Conversely, the accommodation and food service activities industry also had the highest percentage of businesses indicating that customer interest in their goods and services had increased, at 24%.

Businesses were also asked how the coronavirus pandemic had affected business footfall, compared with normal expectations for this time of year.

Across all industries, of businesses currently trading:

• 24% reported footfall had decreased
• 12% reported footfall had stayed the same
• 5% reported footfall had increased

The arts, entertainment and recreation industry, and the accommodation and food service activities industry reported the highest percentages of businesses indicating that footfall had decreased, at 70% and 59% respectively.

Conversely, the accommodation and food service activities industry also had the highest percentage of businesses indicating that footfall had increased, at 14%.

While the accommodation and food service activities industry reported the second highest percentage of businesses reporting a decrease in customer interest and footfall, the industry also reported the highest percentage of businesses reporting an increase in these variables. The high percentage of businesses reporting an increase in customer interest and footfall may reflect the impact of the government Eat Out to Help Out scheme throughout the month of August, where the government assisted with partially covering the cost of meals for three days of the week.

Additional data regarding footfall are published as part of the Office for National Statistics (ONS) latest indicators release. These data are provided by Springboard, a provider of data on customer activity. They measure the volume of footfall compared with the same day the previous year at the overall level and across categories of high streets, retail parks and shopping centres.

In Wave 12 of the Business Impact of Coronavirus (COVID-19) Survey (BICS), businesses not permanently stopped trading were asked if they had issued any credit notes or vouchers to customers for postponed or cancelled bookings, services or events, because of the coronavirus (COVID-19) pandemic.

Across all industries, of businesses not permanently stopped trading:

• 13% reported they had issued credit notes or vouchers to customers
• 80% reported they had not issued credit notes or vouchers to customers

The arts, entertainment and recreation industry, and the education industry (private sector and higher education businesses only) had the highest percentages of businesses reporting they had issued credit notes or vouchers to customers for postponed or cancelled bookings, services or events, at 52% and 38% respectively.

Businesses who had not permanently stopped trading and who had issued credit notes or vouchers to customers for postponed or cancelled bookings, services or events were also asked if their business has any outstanding invoice payments due to them, as a result of the coronavirus pandemic.

Across all industries, of businesses not permanently stopped trading and who issued credit notes or vouchers:

• 53% reported having outstanding invoice payments due to them
• 34% reported not having outstanding invoice payments due to them

The manufacturing industry, and the administrative and support service activities industry had the highest percentages of businesses reporting they had outstanding invoice payments due to them, as a result of the coronavirus pandemic, both at 72%. This was followed by the construction industry, and the information and communication industry, both at 59%.

Additionally, businesses who had not permanently stopped trading were asked if they had fallen behind on invoice payments as a result of the coronavirus pandemic.

Across all industries, of businesses not permanently stopped trading:

• 9% reported they had fallen behind on invoice payments
• 85% reported they had not fallen behind on invoice payments

The accommodation and food service activities industry had the highest percentage of businesses reporting they had fallen behind on invoice payments as a result of the coronavirus pandemic, at 25%. This was followed by the arts, entertainment and recreation industry, and the administrative and support service activities industry, at 18% and 11% respectively.

The Business Impact of Coronavirus (COVID-19) Survey (BICS) is voluntary and may only reflect the characteristics of those that responded; the results are experimental.

The business indicators are based on responses from the voluntary, fortnightly Business Impact of Coronavirus (COVID-19) Survey (BICS), which captures businesses' views on the impact on turnover, workforce prices, trade and business resilience. Wave 12 data relate to the period 10 August to 23 August 2020. The survey questions are available in Business Impact of Coronavirus (COVID-19) Survey questions: 10 August to 23 August 2020.

The different experiences of businesses during the coronavirus (COVID-19) pandemic

In the final results of Wave 12, of 23,904 businesses surveyed, 5,318 businesses (22.2%) responded.

The Wave 12 survey was live for the period 24 August to 6 September 2020 and businesses were asked about their experience for the two-week survey reference period, 10 August to 23 August 2020. Dependent on responses to certain questions, businesses are asked different questions.

For questions or response options referring to the “last two weeks” or expectations of the “next two weeks”, businesses could respond from the point of completion of the questionnaire based on their current experiences. This means that business responses may cover any two-week time period across the following reference periods respectively: 10 August to 23 August 2020 and 24 August to 6 September 2020. More detail on the type of questions asked are available in the detailed dataset in Section 10.

Weighting

Estimates from the Business Impact of Coronavirus (COVID-19) Survey (BICS) are currently unweighted and should be treated with caution when used to evaluate the impact of the coronavirus across the UK economy. Each business was assigned the same weight regardless of turnover, size or industry, and the data in the latest period are preliminary.

Coverage

The approach for the sample design has been to use three standard Office for National Statistics (ONS) surveys – the Monthly Business Survey (MBS), Retail Sales Inquiry (RSI) and Construction, as a sampling frame. Each of these survey samples are drawn from the Inter-Departmental Business Register (IDBR), which covers businesses in all parts of the economy, except those that are not registered for Value Added Tax (VAT) or Pay As You Earn (PAYE); this includes very small businesses, the self-employed, those without employees, and those with low turnover. Some non-profit making organisations are also not registered on the IDBR.

MBS covers the UK for production, and only Great Britain for services. RSI and Construction are Great Britain-focused. Therefore, 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

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. Other than for a minority of larger business or businesses that have a more complex structure, the reporting unit is the same as the enterprise.

Where more than one type of economic activity is carried out by a local unit or enterprise, its principal activity is the activity in which most of the people are employed, and it does not necessarily account for 50% or more of the total employment of the unit. There are detailed rules for determining Standard Industrial Classification (SIC) for multiple-activity economic units.

Regional estimates

Regional BICS estimates are produced by taking the survey return from each reporting unit then applying this to the reporting unit's local sites. If a business has a site or several sites (also known as local units) within a country, using information from the IDBR, then this business is defined to have presence there.

The business is then allocated once within each region (regardless of the number of sites) and the information provided by the reporting unit as a whole copied and used within each country.

Aggregates of Nomenclature of Territorial Units for Statistics: NUTS1 regions such as the UK or England may have higher or lower response proportions than any of their constituent regions because of differences in the sample composition in terms of company workforce.

Since the larger, aggregate regions such as the UK or England generally have a larger proportion of smaller companies, if there is a substantial difference between the response proportions of larger and smaller companies, this will be reflected in the top-line figures.

Sample

Only the businesses that have responded to Wave 12 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) are represented in these data, and as such it is not fully representative of the UK as a whole. Currently, we do not apply weighting methods to these data.

The sampling frame used in the BICS was designed to achieve adequate coverage of the listed industries from the monthly business surveys. Coverage and response rate of the medium to largest businesses in terms of total employment is satisfactory to produce estimates on this basis.

To help interpretation of the data, we have presented results based on the number of employees in each business, grouping fewer than 250 employees and those with 250 employees or more.

All businesses with an employment of greater than 250 employees and included within the three monthly surveys (MBS, RSI, Construction) are included in the BICS sample with a random sample of 1% for those with an employment between 0 and 249.

The sample comprises 23,904 businesses with a split of 7,265 in employment for 250 and over and 16,639 for employment between 0 and 249. This breaks down further to 13,921 for employment between 0 and 99, and 2,718 for employment between 100 and 249.

As the sample is selected fortnightly, the same businesses will be selected for at least two waves depending on how many coronavirus survey selections there are between the selection of these feeder surveys. Because of the randomly selected element, there will be differences in this part of the sample once the feeder surveys have been redrawn. As this is a voluntary survey, businesses may or may not choose to respond to the different waves. Response coverage can be mixed between the different waves.

While we have the ability to align the reporting unit to lower-level detail, and also increased detail on the SIC, it is not advisable given the sparseness of response in certain industries and size bands.

Business Impact of Coronavirus (COVID-19) Survey

The Business Impact of Coronavirus (COVID-19) Survey (BICS) is voluntary and responses are qualitative, which should be treated with caution, as results reflect the characteristics of those who responded and not necessarily the wider business population.

The survey was designed to give an indication of the impact of the coronavirus (COVID-19) on businesses and a timelier estimate than other surveys.

Comparison of waves

Comparison of the proportions of businesses trading status between waves should be treated with caution because of the voluntary nature of the survey, the difference in response rates and dependency on those businesses that only responded in particular waves.

A initial article on Business impact of coronavirus, analysis over time, UK: Waves 2 to 5 captures common businesses responses on how their turnover, workforce, prices, trade and business resilience have been affected in the two-week reference period. These data relate to the period 23 March 2020 to 17 May 2020 (Wave 2 to Wave 5).

An updated article on Insights of the Business Impact of Coronavirus (COVID-19) Survey: 23 March to 5 April (Wave 2) to 1 to 14 June (Wave 7) 2020 analyses business responses on how their turnover, cash flow and workforce have been affected in each two-week reference period.

Publication of coronavirus- related data

This bulletin is published on a fortnightly basis. This is to ensure we are meeting user needs for more timely data.

High-level provisional estimates will be included as part of the Office for National Statistics (ONS) latest indicators release in the alternate weeks.