Coronavirus and the economic impacts on the UK: 4 June 2020

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

• Coronavirus and the latest indicators for the UK economy and society: 4 June 2020

• Of businesses in the UK who have temporarily closed or paused trading, 16% reported they expect to restart trading in the next two weeks and 9% expect to start trading again in the next two to four weeks (from the point of completion of the survey).

• At a UK level, 62% of all businesses continuing to trade reported their turnover had been lower than normal between 4 May and 17 May 2020.

• Of businesses intending to restart trading in the next two weeks, from the point of completion of the survey, 12% of the workforce are expected to return from remote working, while 33% are expected to return from furlough.

• The two most common measures that businesses indicated they intend to implement when they restart trading were social distancing and personal protective equipment (PPE), at 89% and 82% respectively.

• Of all businesses who have not permanently stopped trading, 42% reported they had cash reserves to last less than six months, of which there was little difference between businesses with different workforce sizes.

These are the final results from Wave 5 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) for the period 4 May to 17 May 2020, which closed on 31 May 2020.

Of the 6,364 UK businesses that responded (out of a sample size of 20,566) to Wave 5 of BICS, 82% reported continuing to trade between 4 May and 17 May 2020; while 18% reported they had temporarily closed or paused trading. This differed little between the size of businesses.

A small number of businesses (less than 1%) also responded that they had permanently ceased trading in the period 4 May to 17 May 2020.

Across all industries, of businesses who indicated they were continuing to trade, 8% responded they had restarted trading in the last two weeks. The accommodation and food services activities, construction and manufacturing sectors reported the largest percentage of businesses to have restarted trading in the period 4 May to 17 May 2020; at 27%, 21% and 14% respectively.

Businesses who had temporarily closed or paused trading were also asked when they expect to restart trading.

The survey covers the reference period 4 May to 17 May 2020, but businesses could reply to the survey up until 31 May 2020. Of the 6,364 respondents, 14% replied to the survey between 27 May and 31 May 2020.

Following the announcement by the UK government on 26 May 2020 that non-essential retailers are able to re-open from 15 June, businesses replying to the survey may have taken this into account when indicating when they intend to restart trading. Of the businesses that replied to the survey from 27 May 2020, 16% reported having temporarily closed or paused trading and of those, 33% indicated they intend to restart trading in the next four weeks.

Of businesses who have temporarily closed or paused trading, 16% reported they expect to restart trading in the next two weeks; 9% in the next two to four weeks; 30% in more than four weeks, with the remaining 45% not sure. Businesses may have responded that they were not sure when they would restart trading prior to the government announcement about non-essential retailers on 26 May 2020.

The manufacturing, construction, and wholesale and retail trade sectors were the top three industries reporting the largest percentages of businesses indicating they expect to restart trading in the next two weeks, at 36%, 35% and 27% respectively.

Of businesses with 250 employees or more, 21% of businesses reported that they intend to restart trading again in the next two weeks compared with 14% of businesses with fewer than 250 employees.

The following section analyses the financial performance of businesses who indicated they were continuing to trade and percentages are a proportion of all those businesses continuing to trade.

Increased turnover categories have been combined for presentational purposes, but the breakdown is available in the detailed dataset in Section 8.

At a UK level, of businesses that responded they were continuing to trade (5,216 businesses), 62% reported their turnover had been lower than normal between 4 May and 17 May 2020.

The North East was the region that had the greatest proportion of businesses that saw a decrease in turnover with 73%, and the lowest proportion of businesses with turnover unaffected at 19%.

London and Northern Ireland both had the highest proportion of businesses that reported that their turnover had been unaffected at 34%. They also had the lowest proportion of businesses who reported that their turnover decreased, with 59% in London and 54% in Northern Ireland.

Of those businesses who were continuing to trade, the main sectors to have reported that their turnover decreased by more than 50% were the arts, entertainment and recreation sector (63%); the accommodation and food service activities sector (62%), and the construction sector (40%).

The human health and social work activities (non-public sector businesses only), and the information and communication sector reported the largest percentages of businesses who responded that their turnover had been unaffected in the period, at 60% and 56% respectively.

The main sectors to have reported the highest percentage of businesses indicating that their turnover increased outside of normal range were wholesale and retail trade (8%) and transportation and storage (4%).

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 complexities 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.

For those businesses who have responded, and were continuing to trade, apportioned by employment size:

• 20% of the workforce had been furloughed under the terms of the UK Government’s Coronavirus Job Retention Scheme; of which the arts, entertainment and recreation sector, and the accommodation and food services sector had the highest proportions, 63% and 62% respectively
• 74% of the workforce were still working as normal for the period between 4 May and 17 May 2020
• 3% of the workforce were off sick or in self-isolation because of the coronavirus (COVID-19)

As a proportion of all businesses who were continuing to trade, 36% of businesses reported laying off staff in the short-term and 31% reported reducing working hours as the most common measures being taken to cope with the impact of the coronavirus on the workforce. The accommodation and food service activities sector reported, by far, the largest percentage of businesses indicating they had decreased working hours, at 60%, while the construction industry reported the largest percentage of businesses indicating they were laying off staff in the short-term, at 48%.

Figure 4 presents the proportion of the workforce being furloughed for sampled businesses who have not permanently stopped trading. This includes all those continuing to trade and all those who responded they have temporarily closed or paused trading between 4 May and 17 May 2020.

For surveyed businesses who have not permanently stopped trading, apportioned by employment size:

• 28% of the workforce had been furloughed under the terms of the UK government’s Coronavirus Job Retention Scheme
• the transportation and storage sector had the highest proportion of the workforce being made redundant across all industries, at 1% between 4 May and 17 May 2020
• for all other industries who responded, less than 1% of the workforce had been made redundant between 4 May and 17 May 2020

Businesses that responded they had temporarily closed or paused trading were also asked independently what proportions of their workforce had been furloughed or made redundant between 4 May and 17 May 2020. Of businesses that had temporarily closed or paused trading, apportioned by employment size:

• 80% of the workforce were furloughed
• less than 1% of the workforce had been made redundant
• 19% of the workforce had other arrangements between 4 May and 17 May 2020

Of businesses that had temporarily closed or paused trading and were intending to restart trading in the next two weeks, at a UK level, the proportion of the workforce expected to return from remote working is 12%, while 33% are expected to return from furlough.

Of businesses that have temporarily closed more than two weeks ago and intend to start trading in either two weeks, two to four weeks or more than four weeks’ time, 89% reported intending to implement social distancing measures and 82% reported intending to implement personal protective equipment (PPE). The construction, manufacturing and real estate activities sectors all reported 100% of businesses intending to implement social distancing, while 97%, 90% and 100% respectively reported intending to implement PPE.

The sector indicating the lowest percentage of businesses intending to implement social distancing and PPE was the administrative and support service activities sector, at 79% and 67% respectively. However, as an industry it did have the second-largest percentage of businesses indicating they had other arrangements, at 17%, with manufacturing having the largest at 19%.

Less than 1% of businesses reported intending to implement no safety measures at all, 10% were not sure and 14% indicated they intended to implement other safety measures.

The following section presents percentages relative to all businesses who have not permanently stopped trading. This includes all those continuing to trade and all those who responded they have temporarily closed or paused trading between 4 May and 17 May 2020

Of all surveyed businesses who had not permanently stopped trading, 81% had applied for at least one government scheme.

The most popular government scheme applied for was the Coronavirus Job Retention Scheme (CJRS), at 79%.

There was a difference between the percentage of businesses applying for the business grant government schemes and the government-backed accredited loans or finance agreements between businesses of fewer than 250 employees and 250 employees or more. Of businesses with fewer than 250 employees, 19% had applied for a business grant compared with 11% of businesses with 250 employees or more. While 19% of the former had applied for government-backed accredited loans or finance agreements compared with 10% of the latter.

The accommodation and food service activities and the arts, entertainment and recreation sectors reported the highest percentages of businesses applying for the CJRS, at 97% and 92% respectively.

Of businesses who have not permanently stopped trading, 82% of businesses in Scotland had applied for the CJRS, compared with 80% in both England and Wales, and 75% in Northern Ireland.

Of businesses who have not permanently stopped trading, 19% of those operating in England and 20% in Northern Ireland had not applied for any of these schemes, compared with 17% of those operating in Scotland and 15% in Wales.

The information and communication sector and human health and social work activities sector were the two industries that indicated the highest percentage of businesses not applying for any of the government schemes on offer, 49% and 48% respectively. While the accommodation and food service activities sector was consistently the sector indicating the largest proportion of businesses applying for government schemes across all government schemes available.

Of businesses who responded they had applied for either, or both, the CJRS and the government-backed accredited loans or finance agreements, only 10% reported not having received any funds from these schemes.

Businesses within the real estate activities, and accommodation and food service activities sector reported the highest percentages of businesses having received the CJRS at 96% and 95% respectively. The real estate activities and the administrative and support service activities sectors reported the highest percentages of businesses having received government-backed accredited loans or finance agreements, at 17% and 15% respectively.

Of businesses with fewer than 250 employees, 12% had received government-backed accredited loans or finance agreements, compared with 6% of businesses with 250 employees or more. There was little difference between the percentages of those having received the CJRS between workforce size.

Across all businesses who had not permanently stopped trading, 79% reported expecting to use the CJRS in the next two weeks. The accommodation and food service activities sector, and the arts, entertainment and recreation sector both reported the highest percentages of businesses expecting to use the CJRS in the next two weeks, at 96% and 93% respectively.

Of those surveyed businesses who were continuing to trade and had received funding from a government scheme, 75% reported that the funding they received from these schemes helped the business to continue trading. Those businesses within real estate activities, accommodation and food service activities and the administrative and support service activities sector reported the largest percentages of businesses indicating the funding received had helped them to continue trading, at 83%, 82% and 80% respectively. Across all industries, 25% reported that the funding did not impact their ability to continue trading.

Of businesses who had not permanently stopped trading, 82% had not received any other financial assistance from banks or building societies, 11% had, with the remainder unsure.

When broken down by trading status, of the businesses continuing to trade, 9% reported to have received financial assistance from banks or building societies and of this, 77% reported that it had helped the business to continue trading.

Of businesses continuing to trade and whose financial performance was outside of normal expectations, 8% reported online sales for their business had increased compared with 6% who reported their online sales had decreased in the period 4 May to 17 May 2020. Across all industries, 69% reported the business does not have online sales. Other options regarding online sales were available to businesses to choose from and are available in the detailed dataset.

Less than 1% of responding businesses had to stop selling goods or services online in the period 4 May to 17 May 2020, while just over 2% started selling goods or services online.

The wholesale and retail trade, and accommodation and food service activities sectors reported the largest percentages of businesses indicating that online sales had increased, at 21% and 17% respectively; while the arts, entertainment and recreation sector reported the largest percentage of businesses indicating that online sales have decreased, at 24%.

Businesses continuing to trade, and whose financial performance was outside normal expectations, were also asked in Wave 5 whether they had used any online services to support the business during the coronavirus (COVID-19) pandemic. The most common online service used was an increased or new use of video conferencing for internal communications, at 66%, followed by an increased or new use of online services to help communication with customers, at 30%.

Of all businesses continuing to trade (5,216 businesses), 94% reported they had the ability to meet business demands in the last two weeks of the survey period. This did not differ between employment size for businesses with fewer than 250 employees or those with 250 employees or more, at 94% and 95% respectively.

The industry reporting the highest proportion of businesses indicating the workforce could not meet business demand was in manufacturing, at 6%.

Figure 10 presents percentages as a proportion of all businesses who have not permanently stopped trading. This includes all those continuing to trade and all those who responded they have temporarily closed or paused trading between 4 May and 17 May 2020.

Cash reserve categories, in Figure 10, between zero and six months have been combined for presentational purposes, but the breakdown is available in the detailed dataset found in Section 8.

There was a difference between businesses with fewer than 250 employees and those with 250 employees or more in terms of how long they indicated their cash reserves could last.

The accommodation and food service activities sector and the arts, entertainment and recreational sector were the two industries with the highest percentages of businesses indicating they had cash reserves for less than six months, at 56% and 55% respectively; and the largest percentages of businesses across all industries indicating they had no cash reserves, at 9% and 7% respectively.

While the education sector and information and communication sector reported the highest proportions of businesses indicating they had the cash reserves to last more than six months, at 48% and 45% respectively.

At a country level, there is little difference in those reporting they had no cash reserves. Wales had the highest proportion of businesses with less than six months of cash reserves at 45%, higher than any other region. Scotland had the highest proportion of businesses with more than six months of cash reserves, at 36%.

Access to BICS related microdata

The BICS microdata for Waves 1 to Wave 4 can now be accessed via the Secure Research Service (SRS). The BICS microdata for each wave will be released on a rolling basis in the following week once the publication of each wave is completed.

The microdata will be confidentialised and not disclose any specific business.

Only researchers accredited under the Digital Economy Act are able to access data in the Secure Research Service (SRS). You can apply for accreditation through the Research Accreditation Service (RAS) and will have to have relevant academic or working 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). The UK Statistics Authority have published an example project application for guidance.

In order to access the SRS, you must also have to work for an organisation with an Assured Organisational Connectivity agreement in place.

The business indicators are based on responses from the voluntary, fortnightly Business Impact of Coronavirus (COVID-19) Survey, which captures business’ views on impact on turnover, workforce prices, trade and business resilience. Wave 5 data relate to the period 4 May to 17 May 2020. The survey questions are available in Business Impact of Coronavirus (COVID-19) Survey (BICS) questions: 4 May to 17 May 2020.

There were several additional questions in Wave 5 that are new to the BICS from previous waves. These include information on expectations of trading; online sales; safety measures; refinement of information of government schemes; and financial assistance.

The different experiences of businesses during COVID-19

In the final results of Wave 5, of 20,566 businesses surveyed, 6,364 businesses (31%) responded.

The Wave 5 survey was live for the period 18 May to 31 May 2020 and businesses were asked about their experience for the two-week survey reference period 4 May to 17 May 2020. Dependent on responses to certain questions, businesses are asked different questions. The main various response populations included within this release are indicated in Table 2.

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 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-Departrmental 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 UK for production and only Great Britain for services. Retail sales 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 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 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 Inter-Departmental Business Register (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.

Sample

There has been an additional sample boost of 2,000 businesses to Wave 5 of BICS. These businesses are primarily located in Scotland and Wales in order to produce more robust estimates because of limited coverage in previous waves. Because of an increase in the sample this might impact on the estimates provided in this release from previous waves of BICS.

Only the businesses that have responded to Wave 5 of BICS are represented in these data, and as such they are 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.

The sample is more indicative of a panel of medium to large businesses with only a very small representation of those businesses with an employment of fewer than 100 employees.

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 250 employees and more, 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.

This gives a total of 20,566 businesses in the sample; with a split of 7,334 in employment for 250 employees and more and 6,616 for employment between 0 and 249. This breaks down further for 3,817 for employment between 0 and 99; and 9,415 for employment between 100 and 249. Based on the achieved response rates for the different size bands, the data for the smaller sized businesses should be treated with caution.

Response rates for these size bands are available in the detailed Business Impact of COVID-19 Survey (BICS) dataset.

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 band.

We are continuing to evaluate and monitor the BICS sample design. We are reviewing the existing sample and our intention is to update the scope and coverage from Wave 7 onwards.

Business Impact of 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.

These data should not be used in place of official statistics. The survey was designed to give an indication of the impact of the coronavirus on businesses and a timelier estimate than other surveys.

The data from Wave 5 of the new fortnightly Business Impact of Coronavirus (COVID-19) Survey (BICS) covers the period 4 May to 17 May 2020, across all business sectors covered by the Monthly Business Survey (including retail sales index and construction).

We do not recommend comparison between the latest data from BICS and previous releases because of changes in the questionnaire and additional questions. Further analysis is currently being undertaken to allow this for future publications.

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. For example, there were 1,366 businesses that responded they were continuing to trade in Wave 5 that did not respond in Wave 4. Conversely only 1,235 businesses stated they were continuing to trade in Wave 4 but did not respond in Wave 5.

Publication of coronavirus (COVID-19) related data

We will be publishing this bulletin on a fortnightly basis. This is to ensure we are meeting user needs for more timely data. We will be adding new data and experimental indicators as and when data become available each week.

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