Coronavirus and the economic impacts on the UK: 13 August 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: 13 August 2020
• Coronavirus and the social impacts on Great Britain: 7 August 2020

• Of all responding businesses, most industries reported 90% or more of businesses as currently trading, and as having been, for more than the last two weeks.
• Of businesses that have temporarily paused or closed trading, 6% intended to close some sites in the next three months, compared with 3% of businesses currently trading.
• Across all businesses currently trading, 29% reported that operating costs were greater than, or equal to, turnover.
• The arts, entertainment and recreation sector reported the largest percentage of businesses indicating that operating costs had exceeded turnover at 42%.
• The arts, entertainment and recreation sector reported the highest proportion of the workforce returning from furlough leave in the last two weeks, at 25%, followed by the accommodation and food service activities sector and the construction sector, at 17% and 10% respectively.
• Of businesses that have not permanently stopped trading, 32% had postponed or cancelled bookings, services and events.

Final results from Wave 10 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) are for the period 13 to 26 July 2020, which closed on 9 August 2020.

Of the 5,733 businesses that responded (out of a sample size of 24,464) to Wave 10 of BICS, 94% of businesses reported currently trading as their current trading status, while 6% reported that they had temporarily closed or paused trading.

A small number of businesses (approximately 1%) also responded that they had permanently ceased trading in the period that the survey was live – 27 July to 9 August 2020.

Of all responding businesses:

• 90% had been trading for more than the last two weeks
• 3% had started trading again within the last two weeks after a pause in trading
• 2% had paused trading but intended to restart trading in the next two weeks
• 4% had paused trading but did not intend to restart in the next two weeks

In the UK, of businesses who reported to have started trading within the last two weeks after a pause in trading, the arts, entertainment and recreation sector reported the largest percentage, at 16%. This was followed by the accommodation and food services sector at 14%

The arts, entertainment and recreation sector and the accommodation and food service activities sector also reported the largest percentages of businesses that indicated they had paused trading but were intending to restart in the next two weeks, at 8% and 5% respectively.

Conversely, the arts, entertainment and recreation sector and the accommodation and food service activities sector also reported the largest percentages of businesses indicating that they had paused trading but were not intending to restart in the next two weeks, at 25% and 11% respectively.

In Wave 10, businesses that had not permanently stopped trading were also asked if they intended to close any of their business sites in the next three months.

The majority of businesses that had not permanently stopped trading reported that they did not intend to close any sites in the next three months, at 86%. The wholesale and retail trade sector, the education sector (private and higher education businesses only), and the accommodation and food service activities sector reported the largest percentages of businesses indicating that they were intending to shut some business sites in the next three months, at 5% for all three sectors.

Split by trading status, 6% of businesses that were temporarily paused or had closed trading intended to close some sites in the next three months, compared with 3% of businesses currently trading.

Of the small percentage of businesses that indicated they were intending to close some sites in the next three months, 68% expected closing these sites to affect their businesses workforce through permanent redundancies; 30% expected the workforce to relocate; while 15% expected the workforce to move to remote working. Other effects on the workforce were specified in the question response options and can be found in the detailed dataset.

Increased turnover categories have been combined for presentational purposes, but the breakdown is available in the detailed dataset.

Of businesses currently trading, the sector that had the highest percentage of their businesses reporting that their turnover increased was the wholesale and retail trade sector at 20%.

Of businesses currently trading, the industries with the highest percentages of their businesses reporting that their turnover had decreased by more than 50% were the arts, entertainment and recreation sector and the accommodation and food service activities sector, at 47% and 33% respectively. None of the other industries reported more than 20% for this category.

The North East was the region that had the greatest proportion of businesses that saw a decrease in turnover, with 61%. The North East also had the lowest proportion of businesses with turnover unaffected, at 21%.

In contrast, Northern Ireland saw the lowest proportion of businesses with a decrease in turnover, at 52%, and the highest proportion of businesses with turnover unaffected, at 34%. However, this may be a result of low response from businesses with a presence in Northern Ireland, at just 15%, compared with the UK response rate of 23%.

In Wave 10, businesses were also asked about the impact of operating costs on business turnover. For presentational purposes, turnover and operating costs categories have been combined but the detailed breakdowns are available in the detailed dataset.

Across all businesses currently trading:

• 45% reported that turnover exceeded operating costs
• 16% reported that operating costs exceeded turnover
• 13% reported that turnover was equal to operating cost
• 27% were unsure

At an industry level, the arts, entertainment and recreation sector reported the largest percentage of businesses indicating that operating costs had exceeded turnover at 42%, followed by the accommodation and food service activities sector at 29%.

In comparison, the manufacturing sector and real estate sector reported the largest percentage of businesses indicating that turnover exceeded operating costs, at 54% and 53% respectively.

A breakdown of operating costs by industry and workforce size upon turnover can be found in the detailed dataset.

Surveyed businesses that 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 the 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.

Of businesses that had not permanently stopped trading, 14% of the workforce had been furloughed under the terms of the UK government’s Coronavirus Job Retention Scheme (CJRS) (apportioned by employment size). The arts, entertainment and recreation sector and the accommodation and food service activities sector had the highest proportions of furloughed workers, at 46% and 31% respectively.

Across all industries, of all businesses that had not permanently stopped trading, 2% of the workforce were off sick or in self-isolation because of the coronavirus (COVID-19), with statutory or company pay.

Across all industries, the majority of the workforce were either working remotely (38%) or at their normal place of work (44%). The information and communication sector had the highest proportion of their workforce working remotely, at 80%, followed by the education sector (private and higher education businesses only) and the professional, scientific and technical activities sector, at 75% and 67% respectively. The human health and social work activities sector (private sector businesses only) reported the highest proportion of their workforce working at their normal place of work, at 76%.

When apportioned by workforce size, less than 1% of the workforce had been made permanently redundant across all industries that had not permanently stopped trading apart from in the arts, entertainment and recreation sector, the administrative and support services activities sector, and the construction sector at 3%, 2% and 1% respectively.

The proportions of the workforce classified as “other” by businesses most often related to those on maternity leave, long-term sickness, zero-hour contract staff and unpaid leave.

For a more detailed outline of these “other” working arrangements across waves, Coronavirus and the experiences of UK businesses, textual analysis: March 2020 to July 2020 outlines how these “other” working arrangements have changed over Waves 2 to 9.

When interpreting the proportion of the workforce estimates returning from remote working or from furlough leave in the last two weeks, consideration of the sectors that had a higher proportion of their workforce furloughed is needed. For example, of businesses currently trading, while the education sector (private and higher education businesses only) reported that 2% of the workforce had returned from furlough in the last two weeks, the total proportion of the workforce on furlough was 9%, compared with 46% in the arts, entertainment and recreation sector.

Of businesses currently trading, 6% of the workforce had returned from furlough in the last two weeks, while 4% had returned from remote working to the normal workplace. The arts, entertainment and recreation sector reported the highest proportion of the workforce returning from furlough leave in the last two weeks, at 25%, followed by the accommodation and food service activities sector and the construction sector, at 17% and 10% respectively. The accommodation and food service activities sector reported the highest proportion of the workforce returning to their normal place of work at 8%.

Of businesses that had not permanently stopped trading and that had a proportion of their workforce furloughed, 39% were providing top-ups.

Of businesses that had not permanently stopped trading and that were topping up their furloughed workers’ pay (apportioned by workforce size), 68% of the workforce had their pay topped up. Those businesses within the human health and social work activities sector (private sector businesses only) and the education sector (private and higher education businesses only) reported the largest proportion of the furloughed workforce receiving top-ups, at 97% and 96% respectively.

Figure 9: Of all responding businesses, social distancing, hygiene measures and personal protective equipment (PPE) were the top three most common safety measures

Safety measures, businesses that have not permanently stopped trading, broken down by industry, UK, 13 to 26 July 2020

Source: Office for National Statistics – Business Impact of Coronavirus (COVID-19) Survey

Notes:

1. Final results, Wave 10 of the Office for National Statistics (ONS) Business Impact of Coronavirus (COVID-19) Survey (BICS); businesses that have not permanently stopped trading.
2. Bars may not sum to 100% because of rounding, percentages less than 1% being removed for disclosure purposes, businesses could select multiple options and other safety measures have been removed from the chart for presentational purposes – further detail can be found in the detailed dataset in Section 10.
3. Other services and Mining and quarrying have been removed for disclosure purposes, but their totals are included in “All industries”.

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The three most common measures that businesses that had not permanently stopped trading indicated that they were implementing, or were intending to implement, in the workplace were: social distancing, hygiene measures and personal protective equipment (PPE), at 91%, 85% and 81% respectively. This has been a consistent trend across all waves and emphasises the long-term importance of these measures.

Across all industries, 73% reported having implemented, or intending to implement, all three of the most common safety measures, while 3% reported having implemented, or intending to implement, no safety measures at all.

Further details of additional safety measures and operating costs are available in the detailed dataset.

This section presents percentages relative to all businesses that have not permanently stopped trading.

Figure 10: 78% of businesses who had not permanently stopped trading had applied for the CJRS, while 96% reported to have received the CJRS

Government schemes estimates from the Business Impact of Coronavirus Survey, 13 July to 26 July 2020, UK

Source; Office for National Statistics – Business Impact of Coronavirus (COVID-19) Survey

Notes:

1. Final results, Wave 10 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 – further detail can be found in the detailed dataset in Section 10.
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 13 July to 26 July 2020. However, for questions regarding government schemes, businesses may respond from the point of completion of the questionnaire (27 July to 9 August 2020).

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The accommodation and food service activities sector and the arts, entertainment and recreation sector reported the highest percentages of businesses applying for the Coronavirus Job Retention Scheme (CJRS), at 96% and 90% respectively. These percentages have remained fairly consistent over recent weeks, and breakdowns for each scheme can be found for each Wave in the Business Impact of Coronavirus (COVID-19) Survey (BICS) results.

The human health and social work activities sector (private sector businesses only) and the information and communication sector reported the highest percentages of businesses that had not applied for any of these schemes, at 59% and 48% respectively.

Across all industries that had applied, 90% or more of businesses reported that they had received the CJRS.

In Scotland, 83% of businesses had applied for the CJRS, compared with 81% in Northern Ireland, 78% in England and 78% in Wales. There was some variation between the regions, with 94% of businesses receiving funds in Wales, compared with 97% in England, Scotland and Northern Ireland. In England, 20% of businesses had not applied for any of these schemes, compared with 16% in Northern Ireland, 15% in Wales and 14% in Scotland.

The accommodation and food service activities sector had the highest percentage of businesses using the business rates holiday (77%) and HM Revenue and Customs’ (HMRC’s) Time to Pay scheme (28%) initiatives.

Further breakdowns by industry of government schemes and initiatives can be found in the detailed dataset.

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

Cash reserve categories in Figure 11 between zero and six months have been combined for presentational purposes, but the breakdown is available in the detailed dataset.

The arts, entertainment and recreation sector and the accommodation and food service activities sector had the highest percentages of businesses indicating they had no cash reserves at 8% and 7% respectively.

The accommodation and food service activities sector also had the highest percentage of businesses indicating they only had cash reserves to last between zero and six months, at 56%, followed by the construction sector at 53% each.

Conversely, the education sector (private and higher education businesses only) and the information and communication sector reported the highest percentage of businesses indicating they had cash reserves to last more than six months, at 50% and 49% respectively.

Businesses that had not permanently stopped trading were asked how they had handled the postponing or cancelling of bookings, services and events.

The arts, entertainment and recreation sector and the education sector (private and higher education businesses only) had the highest percentages of businesses reporting that they had postponed or cancelled bookings, services and events, at 86% and 77% respectively.

The three most common management approaches that responding businesses that had not permanently stopped trading indicated they were using when bookings, services and events were postponed or cancelled were rescheduling for a future date, offering the option to re-book for future dates and offering full refunds, at 62%, 50% and 38% respectively.

A higher percentage of businesses within the transportation and storage sector, the accommodation and food service activities sector, the education sector (private and higher education businesses only) and the arts, entertainment and recreation sector reported offering full refunds than rescheduling for a future date.

Further details of additional management approaches used for postponed or cancelled bookings, services and events are available in the detailed dataset.

Feedback

As a user of BICS data, the Office for National Statistics (ONS) would like to hear your thoughts on the future of the survey. If you would like to provide your views, please complete this short questionnaire to help shape the future of BICS. The survey will remain open until 21 August 2020.

Sample and response rates

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 BICS, which captures businesses’ views on impact on turnover, workforce prices, trade and business resilience. Wave 10 data relate to the period 13 to 26 July 2020. The survey questions are available in BICS questions: 13 June to 26 July 2020.

There were several additional questions in Wave 10 that were new to BICS from previous waves. These included detailed questions on site closures and workforce and additional information on prices, imports and exports.

The different experiences of businesses during the coronavirus pandemic

In the final results of Wave 10, of 24,464 businesses surveyed, 5,733 businesses (23.4%) responded.

The Wave 10 survey was live for the period 27 July to 9 August 2020 and businesses were asked about their experience for the two-week survey reference period 13 to 26 July 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: 13 July to 26 July 2020 and 27 July to 9 August 2020. More detail on the type of questions asked are available in the detailed dataset.

Weighting

Estimates from the 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 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), which 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.

The MBS covers the UK for production and only Great Britain for services. The RSI and Construction are focused on Great Britain. 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 sectors 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 businesses 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 and 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 as having 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 is 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 10 of 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 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 with 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 that are included within the three monthly surveys (the MBS, RSI and 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 24,464 businesses with a split of 7,276 in employment for 250 and over and 17,188 for employment between 0 and 249. This breaks down further for 14,471 for employment between 0 and 99 and 2,717 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 SIC, it is not advisable given the sparseness of response in certain industries and size band.  

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 that responded and not necessarily the wider business population.

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

Comparison of waves

Comparison of the proportions of businesses’ trading statuses 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, 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 to 17 May 2020 (Waves 2 to 5).

An updated article, Insights of BICS: 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.