Economic activity and social change in the UK, real-time indicators: 9 December 2021

• Small business sales have shown a gradual upward trend since a large fall following the first UK-wide lockdown (in March 2020); October 2021 was 9% higher than the equivalent month of 2019 (Xero Small Business Insights). See Section 3.

• In the week to 2 December 2021, the aggregate CHAPS-based indicator of credit and debit card purchases increased by 15 percentage points from the previous week, to 121% of its February 2020 average; this is the highest level since before the first UK-wide lockdown and coincides with Black Friday (Bank of England CHAPS data). See Section 4.

• Shelf availability of items between 3 and 6 December 2021 was lowest for "ibuprofen", "frozen turkey" and "fresh pork", with availability for 18% of these items marked as "none" or "low"; shelf availability was highest for the "beer" category, with 69% of this item recorded as having "high" availability (Kantar Public). See Section 5.

• The number of seasonally-adjusted new value-added tax (VAT) reporters in November 2021 decreased by 13% from October and was less than the 2015 to 2019 longer-term average for the first time in 8 months (HM Revenue and Customs (HMRC) VAT returns). See Section 6.

• 53% of businesses reported that, compared with normal expectations, hourly wages for existing employees had not been affected, while 28% reported it was not applicable; 27% and 57% reported the same for new employee wages, respectively (initial results from wave 45 of Business Insights and Conditions Survey (BICS)). See Section 7.

• The system average price (SAP) of gas increased by 4% in the week to 5 December 2021, its fourth consecutive week-on-week increase (National Grid). See the accompanying dataset.

• The seven-day average number of UK daily flights was 3,232 in the week ending 5 December 2021; this is 66% of the level seen in the equivalent week of 2019 and almost three times that of the equivalent week of 2020 (EUROCONTROL). See the accompanying dataset.

• In the week ending 5 December 2021, the seasonally-adjusted average count of traffic camera activity for trucks in the North East increased by 7%, while in London it remained unchanged (Transport for London, North East traffic cameras). See the accompanying dataset.

• The volume of motor vehicle traffic on Monday 6 December 2021 was at 96% of its level in the first week of February 2020, an increase of 2 percentage points from the previous week (Department for Transport).

• There was an average of 271 daily ship visits in the week to 5 December 2021, a 5% increase from the previous week (257), while the average number of daily cargo and tanker ship visits increased by 14% to 97 in the same period; this growth follows a period of reduced shipping activity likely to have been related to Storm Arwen (exactEarth). See the accompanying dataset.

• In the week to 4 December 2021, overall retail footfall in the UK remained broadly similar to the previous week, at 83% of the level seen in the equivalent week of 2019; Greater London and the South East had the highest retail footfall relative to pre-coronavirus (COVID-19) pandemic levels, both at 88% (Springboard).

• Transactions at Pret A Manger stores in the week ending 2 December 2021 fell in 8 of the 10 locations; they remained lowest when compared with their January averages in London airport and London city stores at 76% and 85%, respectively (Pret A Manger).

• The seven-day average estimate of UK seated diners fell by 6 percentage points in the week to 6 December 2021, to 105% of the level in the equivalent week of 2019; this is the lowest this figure has been since the week ending 17 May 2021 (OpenTable).

• There were 13,944 company incorporations in the week to 3 December 2021, a 2% increase from the previous week and 15% higher than the equivalent week of 2019 (12,119) (Companies House). See the accompanying dataset.

Notes:

1. Users should note that the break in the available shipping data (from 14 to 19 June 2021) is when the data collection system changed.

Data on sales and jobs in small businesses are taken from Xero, a global cloud-based accounting software platform with 785,000 small business subscribers in the UK. Movement in sales is based on the face value of invoices issued by firms within each month (including via apps attached to the Xero account). Jobs are measured by the number of unique employees of a business who are issued a payslip in a month. An individual is issued a “payslip” in a particular month if they work at least one hour in that specific month. As such, this measure will not capture employees on furlough for the full month. This definition of sales and jobs does not align with definitions of official estimates of turnover and employment.

This series is publicly available through Xero's Small Business Insights programme and will be updated monthly.

Jobs in small business has not yet made the same level of recovery post lockdown as sales. After reaching brief positive levels of growth in July 2021, the latest October 2021 figure is 3% lower than the same month in 2019.

Figure 2: All sectors recorded positive sales growth in October 2021 compared with October 2019

Year-on-two-year change in sales by industry, small businesses, UK, January 2019 to October 2021

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The accommodation and food services sector was hardest hit throughout the coronavirus (COVID-19) pandemic in terms of sales but has seen positive growth since the lifting of restrictions in Spring 2021. The retail, trade and information media and telecommunications sectors had the strongest sales growth in October 2021, both up 15% compared with the same month two years ago.

Figure 3: Most sectors have experienced negative jobs growth since the start of the coronavirus pandemic

Year-on-two-year change in jobs by industry, small businesses, UK, January 2019 to October 2021

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As with sales, jobs in small businesses operating in the accommodation and food services sector were severely hit by the coronavirus pandemic but have not yet recovered (down 16% in October 2021 compared with the same month two years ago). In contrast, small businesses in the information media and telecommunications sector reported a jobs increase of 25%.

Daily CHAPS-based indicator

These data series are experimental faster indicators for estimating UK spending on credit and debit cards. They track the daily CHAPS payments made by credit and debit card payment processors to around 100 major UK retail corporates. These payments are the proceeds of recent credit and debit card transactions made by customers at their stores, both via physical and online platforms. More information on the indicator is provided in the accompanying methodology article.   

Companies are allocated to one of four categories based on their primary business:    

• "staples" refers to companies that sell essential goods that households need to purchase, such as food and utilities   

• "work-related" refers to companies providing public transport or selling petrol   

• "delayable" refers to companies selling goods whose purchase could be delayed, such as clothing or furnishings

• "social" refers to spending on travel and eating out

Figure 4 shows changes in the value of CHAPS payments received by large UK corporates from their credit and debit card processors, "merchant acquirers".  

In the week to 2 December 2021, the CHAPS-based indicator of credit and debit card purchases in aggregate increased by 15 percentage points from the previous week, to 121% of its February 2020 average level.

All spending categories increased in this latest week:

• "delayable" by 27 percentage points
• "staple" by 17 percentage points
• "work-related" by 5 percentage points
• "social" by 2 percentage points

The significant increases in both "delayable" and "staple" spending coincides with Black Friday, following a similar pattern to that seen last year.

In the latest week, "social" spending was below its February 2020 average level at 95%. "Delayable", "work-related" and "staple" spending were above their February 2020 average levels at 139%, 126% and 125%, respectively.

Monthly CHAPS-based indicator

In November 2021, the monthly CHAPS-based indicator of aggregate credit and debit card spending was at 105% of its February 2020 average level, a 6-percentage point increase from October 2021. This is only the second time since before the first UK-wide lockdown that the monthly CHAPS-based indicator has been greater than 100% of its February 2020 average level (in December 2020 it was 104%).

The monthly data time series is available in the accompanying dataset and includes methodological notes that users should bear in mind. The monthly CHAPS index is calculated by the Office for National Statistics (ONS), rather than being an additional series that is produced and validated by the Bank of England.

Shelf availability research for shops across the UK has been undertaken by Kantar Public. Collectors gathered information on a range of items from up to three different stores across multiple locations, recording availability across four categories: "none", "low", "medium", or "high". It is important to note these categories are subjective as they are recorded by individual collectors. The data were collected between 3 and 6 December 2021. This series will be updated weekly.

In the current period (3 to 6 December 2021), the overall proportion of observations for all items recorded as "high" was 53%, broadly similar to the previous four-day period (26 to 29 November 2021, at 54%). Observations for all items recorded as "none" or "low" was at 9%, unchanged from the previous period.

Across the four availability categories, the largest proportion of observations recorded as "high" was "beer" at 69%, followed by "chocolate selection boxes" and "fresh chicken", at 64% and 62%, respectively. The highest proportion of items with availability recorded as either "none" or "low" was "ibuprofen", "frozen turkey" and "fresh pork", all at 18%.

Data for all categories are available in the accompanying dataset.

The new reporters index measures the number of UK firms sending value-added tax (VAT) returns to HM Revenue and Customs (HMRC) for the first time, which is related to the number of business creations.

The seasonally adjusted number of new reporters in the services industry decreased by 12% from 18,260 in October 2021 to 15,980 in November 2021. In the construction industry, new reporters also decreased by 12% over the same period, from 3,540 to 3,100.

Business turnover estimates

Turnover diffusion indices are an aggregate measure used to track whether most firms are reporting an increase or decrease in turnover in their VAT returns. They are calculated as the percentage of firms with increasing turnover minus the percentage with decreasing turnover.

The heatmap in Figure 7 is a visual way of showing the VAT diffusion indices based on the standard deviation from their historical 2008 to 2019 average. Larger deviations are more darkly coloured, with red representing a negative change, while teal represents a positive change when compared with the previous period.

Figure 7: For the second consecutive month, an equal number of firms reported increasing turnover as those that reported decreasing in October 2021

UK business turnover estimates, diffusion index standard deviation from the mean, up to October 2021, and new reporters, UK, up to November 2021

Notes:

1. Agri - Agriculture, forestry and fishing, All - All industries, SA - Seasonally adjusted.

2. More information is available in the methodology article.

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The month-on-month, all-industry turnover estimate for October 2021 shows that in the past month, out of 39,460 firms, an equal number of firms (net 0%) reported increasing turnover as those that reported decreasing turnover.

A net 3% of firms in the construction industry reported decreasing turnover in October 2021. This is the eighth consecutive month where more firms have reported decreasing turnover than increasing turnover. A net 2% of firms in the agriculture industry reported decreasing turnover in the last month.

In the production industry, a net 4% of firms reported increasing turnover in October 2021. Meanwhile, in the services industry in the last month, an equal number of firms (net 0%) reported increasing turnover as those that reported decreasing turnover.

The figures explained in this section refer to seasonally adjusted data. Non-seasonally adjusted data are available in the accompanying dataset.

Initial results from wave 45 of the Business Insights and Conditions Survey (BICS) cover the reference period 15 November to 7 December 2021, with a response rate of 19.4% (7,385 responses). The survey was live for the period 29 November to 7 December 2021.

Faster indicator

A faster indicator provides insights into economic activity using close-to-real-time big data, administrative data sources, rapid response surveys or Experimental Statistics, which represent useful economic and social concepts.

Company incorporations

Incorporations are when a company is added to the Companies House register of limited companies. This can also include where an existing business applies to become a limited company, where it was not one before.

Voluntary dissolution applications

A voluntary dissolution application is when a company applies to begin dissolution proceedings. As such, they effectively choose to be removed from the Companies House register. For a company to be eligible to voluntarily dissolve, it should not have completed any trading activity for a period of three months.

Compulsory dissolutions

When a company fails to file the required financial accounts and/or confirmation statements, if no contact is received by Companies House following a series of letters to the company and its officers, a first gazette notice is published in the Gazette, a notice of the Registrar's intention to dissolve the company.

Diffusion index

The diffusion index tracks the growth in turnover and expenditure of firms. It is constructed to lie between negative 1 and 1. For example, if 65% of firms have increasing turnover, 30% have decreasing turnover and 5% turnover remains unchanged, then the diffusion index is 0.35.

New reporter

A new reporter is defined as a firm with a value-added tax (VAT) reference (that is, firm identification number), which has not previously reported its VAT returns. New reporters are published within one month of the end of the reporting period. The new reporting behaviour measure is classified by the month the data were received by HM Revenue and Customs (HMRC), known as the receipt date; this is not necessarily the same as the reference period (the period for which the VAT return is made).

UK coronavirus restrictions

A full overview of coronavirus (COVID-19) restrictions for each of the four UK constituent countries can be found here:

• England

• Scotland

• Wales

• Northern Ireland

These restrictions should be considered when interpreting the data featured throughout this bulletin.

Sales and jobs in small businesses

Data on sales and jobs in small businesses (fewer than 20 employees) are taken from Xero, an online accounting software platform with 785,000 small business subscribers in the UK.

Sales are measured based on the face value of invoices issued by firms within each month. Subscriber base changes are accounted for by measuring sales growth in one specific month using the sample of firms, which also operated in the previous year.

Jobs are measured based on the number of unique employees of a business who are issued a payslip in a month. One individual is one payslip in a particular month if they work at least 1 hour in that month. The sample of small businesses is restricted based on the employment size band and erroneous payslips or those identified for non-wage purposes are excluded. Percentage change in payslips is calculated using the weighted average of within-firm year-on-year growth in jobs. As such, this accounts for any change in subscriber base and firms that shutdown entirely because of the coronavirus pandemic.

Small businesses are defined by Xero as organisations with fewer than 20 employees.

Information on the strengths and limitations of the indicators in this bulletin is available in the Coronavirus and the latest indicators of the UK economy and society methodology.