Coronavirus and the economic impacts on the UK: 7 May 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, the UK economy and society, faster indicators: 7 May 2020

• Coronavirus and the social impacts on Great Britain: 7 May 2020

• Of the 6,114 businesses in the UK that responded, 77% indicated they were continuing to trade, with little difference between the countries within the UK.

• Of those businesses that responded, the main sectors reporting temporarily closing or pausing trading were the accommodation and food service activities sector (81%) and the arts, entertainment and recreation sector (80%).

• Of the 4,690 businesses continuing to trade, 58% reported that their turnover had decreased, while 30% reported that their financial performance had not been affected.

• Of businesses continuing to trade, 19% of the workforce had been furloughed in the period 6 April to 19 April 2020.

Final results from Wave 3 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) for the period 6 April to 19 April 2020, which closed on 3 May 2020. Of the 6,114 businesses in the UK that responded (out of a sample size of 17,623) to Business Impact of Coronavirus (COVID-19) Survey (BICS) Wave 3, there were 23% of businesses that responded they had temporarily closed or paused trading for the period 6 April to 19 April 2020, while 77% reported continuing to trade during this period. This differed little between the size of businesses when assigning them to one of two groups: those with fewer than 250 employees and those with 250 employees or more.

Using a form of regional apportionment, it is possible to provide an indication of the different proportions across the various countries within the UK. This is based on businesses that have a regional presence within one or more of the countries. Further details on the regional apportionment can be found in Section 9.

Of the 6,114 businesses that responded, 77% indicated they were continuing to trade. The proportions of trading by country were very similar across each country, with 78% of businesses in England, 78% in Scotland and 76% in Wales continuing to trade.

For Northern Ireland the proportion of businesses continuing to trade was slightly lower at 73%. However, caution should be used for Northern Ireland data because of the smaller sample size and coverage, as businesses with a head office based in Northern Ireland are only covered within the production sector.

The two main sectors to have reported the largest percentages of businesses temporarily closing or pausing trading were the accommodation and food service activities sector and the arts, entertainment and recreation sector, reporting 81% and 80% respectively in the period 6 April to 19 April 2020.

Professional, scientific and technical activities (97%), information and communication (95%), health and social work activities (94%) and the administrative and support service activities (92%) sectors had the largest proportion of businesses responding to state they continued to trade.

Of the businesses that responded they were continuing to trade (4,690 businesses), 30% reported that their financial performance had not been affected in the period 6 April to 19 April 2020.

The following section analyses financial performance of businesses who indicated continuing to trade and figures are a proportion of all those businesses continuing to trade. This differs to the Coronavirus and the economic impacts on the UK: 23 April 2020, which focused analysis based on the proportion of just those that answered each question.

Of these businesses in England, 30% reported that their financial performance had not been affected, compared with 27% in Scotland, 24% in Wales and 34% in Northern Ireland.

At a UK level, 58% of all businesses continuing to trade reported their turnover had decreased between 6 April and 19 April 2020. Within the UK, 57% of businesses reported a decrease in turnover in England, compared with 62% in Wales, 59% in Scotland and 57% in Northern Ireland.

Of those businesses who were continuing to trade, (4,690, businesses), the main sectors to have reported that their turnover decreased by more than 50%, relative to the sample within each industry, were the accommodation and food service activities sector (57%) and the arts, entertainment and recreation sector (51%).

The information and communication sector and the human health and social work activities sector reported the largest percentages of businesses who responded that their turnover had been unaffected in the period, at 54% and 49% respectively.

The main sectors to have reported that their turnover increased and were continuing to trade relative to the sample within each industry were the wholesale and retail trade (9%) and the accommodation and food service activities (7%) sectors. The increase in turnover for those businesses within the accommodation and food service activities sector has mainly been driven by an increase in takeaway services.

Businesses that are still trading or paused 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 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 that have responded, and are continuing to trade, apportioned by employment size:

• 19% 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, and construction sectors had the highest proportion, both with 40%

• 73% of the workforce were still working as normal for the period between 6 April and 19 April 2020

• 6% of the workforce were off sick or in self-isolation because of the coronavirus (COVID-19)

For those businesses that have responded and that either have temporarily closed, have paused trading or are continuing to trade, apportioned by employment size:

• 28% of the workforce had been furloughed under the terms of the UK government’s Coronavirus Job Retention Scheme; of which the accommodation and food service activities sector had the highest proportion, with 73%

• Less than 1% of the workforce were made redundant for the period between 6 April and 19 April 2020

• The transportation and storage sector, and the accommodation and food service activities sector had the highest proportions of the workforce being made redundant across all industries; however, these were still 1% or lower between 6 April and 19 April 2020

Businesses that indicated they had temporarily closed or paused trading were also asked separately what proportions of their workforce had been furloughed or made redundant. Of businesses that had temporarily paused or ceased trading, apportioned by employment size:

• 81% of the workforce were furloughed

• Less than 1% of the workforce had been made redundant

• 19% of the workforce had other arrangements between 6 April and 19 April 2020

These data are based on the same methods of proportions of the workforce as in the analysis of Furloughing of workers across UK businesses: 23 March 2020 to 5 April 2020 for Wave 2 final results.

Of all businesses that responded to the Business Impact of Coronavirus (COVID-19) Survey (BICS) and have not ceased trading, 79% had applied for at least one government scheme. The most popular government schemes applied for were the Coronavirus Job Retention Scheme and the Deferring VAT Payments Scheme, at 67% and 56% respectively.

There is minimal difference between business with fewer than 250 employees and greater than 250 employees between schemes applied for apart from the government-funded small business grant or loan schemes. Of businesses with fewer than 250 employees, 14% applied for a small business grant or loan, compared with 7% of businesses with greater than 250 employees.

Of those businesses either continuing to trade or those who have temporarily closed or paused trading, 67% have applied for the Coronavirus Job Retention Scheme and 56% have applied to defer VAT payments.

By UK country, 67% of businesses have applied for the Coronavirus Job Retention Scheme in England, compared with 74% in Wales, 72% in Scotland and 65% in Northern Ireland. Generally, businesses in Wales and Scotland have applied for more of these initiatives than businesses in England.

Of businesses either temporarily closed or paused trading or continuing to trade, those within Wales indicated the highest percentages of businesses applying to government schemes, across all schemes available, out of all the country breakdowns.

The human health and social work activities sector and the education sector were the top two industries that indicated the highest percentages of businesses not applying for any of the government schemes on offer, 56% and 49% respectively.

The accommodation and food service activities sector was consistently the sector indicating the largest proportion of businesses applying for the government schemes available.

Of those businesses that were continuing trading (4,690 businesses), the majority of businesses that responded felt confident they had the financial resources available to continue operating throughout the coronavirus (COVID-19) period, with 72% of businesses indicating this.

Only 6% of all businesses continuing to trade did not feel confident, with the remainder unsure at the time of their response.

This differed by size of business and the activity of the business. Of businesses with 250 employees or more, 77% responded as being confident, compared with 69% of businesses with fewer than 250 employees.

The two main industries, irrespective of size-band, with the largest percentage of businesses reporting they were not confident they would be able to continue operating throughout the coronavirus pandemic were from:

• the accommodation and food services activities sector (16%)

• the arts entertainment and recreation activities sector (14%)

This dataset includes additional information collected as part of the survey including details on prices, and imports and exports.

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, which captures business’ views on impact on turnover, workforce prices, trade and business resilience. Wave 3 data relate to the period 6 April to 19 April 2020. The survey questions are available in Business Impact of Coronavirus (COVID-19) Survey questions: 6 April 2020 to 19 April 2020.

The different experiences of businesses during COVID-19

Of 17,623 businesses in the UK surveyed in Wave 3, 6,114 businesses (34.7%) responded.

The Wave 3 survey was live for the period 6 April to 19 April 2020, and businesses were asked about their experience for the two-week survey reference period 6 April to 19 April 2020. Dependent on responses to certain questions, businesses are asked different questions. The various response populations included within this release are indicated in Table 3.

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-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 UK for production and only Great Britain for services. Retail sales and Construction are Great Britain focused. Therefore, the BICS will be UK for production-based industries but Great Britain for the other elements of the economy covered.

The industries covered are:

• non-financial services (includes professional, scientific, communication, administrative, transport, accommodation and food, private health and education, and entertainment services)
  
• distribution (includes retail, wholesale and motor trades)
  
• production (includes manufacturing, oil and gas extraction, energy generation and supply, and water and waste management)
  
• construction (includes civil engineering, housebuilding, property development and specialised construction trades such as plumbers, electricians and plasterers)

The following 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

Only the businesses that have responded to Wave 3 of the Business Impact of COVID-19 Survey (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 less 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 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 employees.

This gives a total of 17,623 businesses in the sample; with a split of 7,181 in employment for 250 and over and 10,442 for employment between 0 and 249. This breaks down further for 1,326 for employment between 0 and 99; and 9,116 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.

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 3 of the new fortnightly BICS covers the period 6 April to 19 April 2020, across all business sectors covered by the Monthly Business Survey (including the 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 1,100 businesses that responded they were continuing to trade in Wave 3 that did not respond in Wave 2. Conversely only 970 businesses stated they were continuing to trade in Wave 2 but did not respond in Wave 3.

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’s) faster indicators release in the alternative weeks.