Coronavirus and the latest indicators for the UK economy and society: 21 May 2020

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

• Coronavirus and the economic impacts on the UK: 21 May 2020

• Of businesses reporting as trading between 20 April and 3 May 2020, 6% had restarted trading in the last two weeks; the accommodation and food services activities sector had the largest proportion of businesses restarting trade at 19%.

• 76% of responding businesses had applied for the Coronavirus Job Retention Scheme (CJRS), with 31% of the workforce in these businesses being furloughed.

• During the period 14 May to 17 May 2020, 8 in 10 adults (81%) in Great Britain continued to say they had either not left their home or had only left for work, exercise, essential shopping or medical need.

• On average, the online prices of items in the high-demand products (HDP) basket have decreased by 0.2% between week 8 (3 May to 10 May 2020) and week 9 (11 May to 17 May 2020).

• After a marked downward trend in daily ship visits from mid-March to mid-April 2020, daily ship visits to major UK ports have been steady over the last few weeks, with an average of 283 daily ship visits from 11 May to 17 May 2020.

• New declarations for Universal Credit and new claim advances have both gradually declined to 12 May 2020, following peaks on 27 March and 6 April, respectively.

This bulletin contains:

• Final results from Wave 4 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) of UK businesses for the period 20 April to 3 May 2020.

• Final results from Wave 9 of the Opinions and Lifestyle (OPN) Survey, covering the period 14 May to 17 May 2020 exploring the social impact of the coronavirus on individuals in Great Britain.

• Experimental online price indices for several high-demand products (HDPs) for 16 March to 17 May 2020.

• Monthly and quarterly Value Added Tax (VAT) diffusion indexes, which track changes in VAT reporting behaviour up to Quarter 1 (Jan to Mar) 2020, and the number of new VAT reporters up to April 2020.

• Weekly shipping data for the UK up to week commencing 11 May 2020 and daily shipping data up to 17 May 2020.

• Weekly management information on Universal Credit declarations (claims) and advances for reference period 1 March to 12 May 2020 (see Section 9 on Universal Credit). This is published every Tuesday by the Department for Work and Pensions and will continue to be updated until at least the end of June.

We will add new experimental data and indices as and when new data become available, and list them in this section.

This release does not contain data on the number of deaths involving the coronavirus (COVID-19). Our weekly deaths bulletin and accompanying dataset provides the most up-to-date figures on deaths involving COVID-19 in England and Wales.

This section includes final results from Wave 4 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) for the period 20 April to 3 May 2020, which closed on 17 May 2020.

Figure 1: 76% of responding businesses had applied for the Coronavirus Job Retention Scheme, with 31% of the workforce in these businesses being furloughed

Headline indicators from the Business Impact of Coronavirus Survey, 20 April to 3 May 2020, UK

Notes:

1. Final results, Wave 4 of the Office for National Statistics’ (ONS’) Business Impact of Coronavirus (COVID19) Survey (BICS) (n=6,196).

2. Data for “All businesses” excludes those businesses who have permanently ceased trading.

Figure 1 shows that almost two-fifths of businesses continuing to trade had less than six months of cash reserves (39%), while for businesses who had temporarily closed or paused trading this rose to almost three-fifths of responding businesses (58%). 3% of businesses continuing to trade had no cash reserves, rising to 7% for businesses who had paused trading.

The Coronavirus Job Retention Scheme was the most popular government scheme, with 76% of businesses applying and with 31% of the workforce in these businesses being furloughed. Deferring Value Added Tax (VAT) payments was the second most applied for scheme, followed by business rates holidays.

The accommodation and food services activities, construction and manufacturing sectors reported the largest percentage of businesses to have restarted trading in the period 20 April to 3 May 2020; at 19%, 15% and 12% respectively.

This section includes headline results from wave 9 of the Opinions and Lifestyle (OPN) Survey covering the period 14 May to 17 May 2020. The full results will be published in Coronavirus and the social impacts on Great Britain on 22 May 2020.

This survey was completed after the changes to UK government guidance were announced on Sunday 10 May 2020, as well as the separate guidance issued by the devolved administrations for Wales, Scotland and Northern Ireland.

A timely indication of weekly price change for high-demand products (HDPs) has been developed, covering the period 16 March to 17 May 2020. This analysis is experimental and should not be compared with our regular consumer price statistics.

As experimental indices, these data are subject to revisions as we develop our methodology and systems.

Figure 4 shows that overall the online prices of items in the HDPs basket have decreased by 0.2% from Week 8 (4 May to 10 May 2020) to Week 9 (11 May to 17 May 2020). Pasta sauce showed the largest decrease in prices in this period, while tinned beans showed the largest increase.

Figure 5 presents weekly price movements for aggregated indices and some selected items. The all HDP items, all food, and all household and hygiene indices are relatively stable after seeing slight increases earlier in March and April. Nappies and tinned beans show more volatile movements at the item level.

The time series for all individual HDP items are published in a dataset alongside this release. This week, minor revisions have been introduced as we have improved the methods used to calculate the indices.

Turnover diffusion indices track the proportion of firms reporting an increase or decrease in their turnover in their Value Added Tax (VAT) returns. In Figure 6 the VAT indices are colour-coded based on their standard deviation from the mean across the time series. Larger deviations are more darkly coloured, with red representing negative change, and teal positive change, when compared with the previous period.

Monthly turnover diffusion indices for other industries and the all-industries measure, containing approximately 40,000 firms, are available up to March 2020 in this release. April 2020 estimates of Retail Sales in Great Britain will be published on 22 May 2020.

The first quarterly estimate of GDP for Quarter 1 (Jan to Mar) 2020, including March 2020, was published on 13 May 2020. It is important to note that we are not attempting to forecast or predict gross domestic product (GDP) or other headline economic statistics here, and the indicators should not be interpreted in this way.

Rather, by exploring big, closer-to-real-time datasets of activity likely to have an impact on the economy, we provide an early picture of a range of activities that supplement official economic statistics and may aid economic and monetary policymakers and analysts in interpreting the economic situation.

Figure 6: The Production, Construction and Services sector groups all had strongly negative VAT turnover diffusion indices in March 2020, meaning more firms saw their turnover decrease than increase

Source: Office for National Statistics – Faster indicators

Notes:

1. Agri - Agriculture, forestry and fishing, All - All industries, SA - Seasonally adjusted, NSA - Not seasonally adjusted.

2. All industries are unweighted: each firm contributing to the index has the same weight regardless of turnover, size or industry.

3. The thresholds for the colours in the heatmap are based on standard deviations from the mean of the indicator between 2008 and 2019.

From February to March 2020, the all-industry diffusion index was 2.0 standard deviations below its historical mean, indicating that in general firms’ turnovers were decreasing. This was driven by declines in all the major sectors, with the exception of agriculture, forestry and fishing.

Construction saw a particularly negative diffusion index, more than 5 standard deviations below its historical mean. This is the most negative value construction’s diffusion index has taken since our time series started in January 2008, including during the financial crisis.

The month-on-year-ago all industries diffusion index is relatively less negative than the month-on-month index, but remains significantly below its historical mean.

The new reporters index measures the number of firms sending VAT returns for the first time, which is related to the number of firm births. In April 2020 it dropped 1.1 standard deviations below its historical mean, its lowest value since April 2012.

These shipping indicators are based on counts of all vessels, and cargo and tanker vessels. As discussed in Faster indicators of UK economic activity: shipping, we expect the shipping indicators to be related to the import and export of goods.

Figure 8: New declarations for Universal Credit and new claim advances have both gradually declined following peaks on 27 March and 6 April, respectively

Source: Department for Work and Pensions - Universal Credit declarations (claims) and advances: management information

Notes:

1. These declaration figures have not been derived to the same methodology as official statistics, and therefore the Management Information and official statistics will not be directly comparable. Figures relate to Great Britain only, and Northern Ireland is not included.

The first chart in Figure 8 shows the number of new declarations, which is when an individual or household provides information on their personal circumstances to begin a Universal Credit (UC) claim. Note not all declarations will go on to receive a payment.

In the first half of March 2020, new declarations for individuals were steady between 11,000 and 16,000 each weekday (lower on weekends). This rose steeply in the third and fourth week to peak on 27 March with 146,290 declarations, on the fifth day of lockdown which was announced on 23 March. Numbers then declined gradually in the subsequent weeks to 28,200 new individual declarations on 12 May.

The second chart in Figure 8 shows the number of new claim advances, which provide support to new claimants in financial need until they receive their first regular payment of Universal Credit.

At the beginning of March, advances for new claims were steady at 5,000 to 6,000 per day on weekdays (lower on weekends). New claim advances peaked on 6 April at 35,280, which was 10 days after the peak of new declarations on 27 March. After the peak, new claim advances have steadily fallen to 10,360 on 12 May.

Diffusion index

The diffusion index tracks the growth in turnover and expenditure of firms. It is constructed to lie between negative one and one. For example, if all firms report an increase in turnover or expenditure in the latest period relative to the base period, the index would be one.

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.

High-demand product (HDP) basket

The HDP basket contains everyday essential items that were identified at the beginning of the crisis to have high consumer demand, including items from food, health and hygiene categories. The selection of these items was based on anecdotal evidence on patterns of consumer spend. The basket does not cover all items within these categories.

Shipping

These weekly and daily faster shipping indicators data are created through new experimental methods and are not official statistics. More quality and methodology information is available in Faster indicators of UK economic activity: shipping.

Value Added Tax (VAT)

VAT diffusion indices are created through new experimental methods and are not official statistics. More quality and methodology information is available in Faster indicators of UK economic activity: Value Added Tax returns.

Business Impact of Coronavirus (COVID-19) Survey

The business indicators are based on responses from the voluntary, fortnightly Business Impact of Coronavirus (COVID-19) Survey (BICS), which captures business’ views on impact on turnover, workforce, prices, trade and business resilience. The data relate to final Wave 4 results, covering the survey period 20 April to 3 May 2020, and the survey questions for the period are available in Business Impact of Coronavirus (COVID-19) Survey questions: 20 April 2020 to 3 May 2020.

Estimates from the BICS are currently unweighted and should be treated with caution when used to evaluate the impact of COVID-19 across the UK economy. Each business was assigned the same weight regardless of turnover, size or industry.

More information on the quality and methodology, including response rates, sample size and weighting, is available in the "Measuring the data" section of the Coronavirus and the economic impacts on the UK bulletin.

Social impact of coronavirus (COVID-19) (OPN)

Data on the social impact of the coronavirus (COVID-19) on Great Britain were collected from the Opinions and Lifestyle Survey (OPN). The data relate to the final results for Wave 9, covering the period 14 May to 17 May 2020. In this wave, 2,010 individuals were sampled, with a response rate of 50% (or 995 individuals) for the survey.

The data collection period for this wave of the Opinions and Lifestyle Survey has been reduced to 4 days from 10 or 11 days on previous waves. The time between the survey closing and results being published has also reduced to allow more timely analysis of how attitudes and experiences are changing through the pandemic as changes are made to government guidance. Data were collected for Wave 7 and 8 of the survey from 1 to 10 May and from 7 to 17 May 2020. Because of resource constraints it has not been possible to analyse these data separately in the weekly bulletin, but they will be included in the additional topic-based articles being published over the next few months. The data will also be available through the UK Data Service in the usual way.

More information on the quality and methodology of the OPN Survey is available in the “Measuring the data” section of the Coronavirus and the social impacts on Great Britain bulletin.

Online price change for high-demand products (HDP)

Prices were scraped daily from several large online UK retailers (typically supermarkets and other prominent high-street chains with an online presence) from 16 March to 17 May 2020 for selected items chosen to form the HDP basket (see Table 1 in the online price changes for HDPs methodology).

An average weekly price was then calculated for each unique product and a movement splice GEKS-Jevons index was calculated using a rolling window of five weeks. More information detailing our plan for data collection, compilation and publication of our various prices statistics following movement restrictions as a result of the coronavirus pandemic is available.

More information on the strengths and limitations of the online price changes data is available in the Online price changes of high-demand products methodology.

Shipping indicators and Value Added Tax (VAT)

It should be noted that these indicators are not intended to be an early measure or predictor of gross domestic product (GDP), and their potential relationship with headline GDP should be interpreted with caution. Instead, they provide an early picture of a range of activities that are likely to have an impact on the economy, supplementing official economic statistics.

Business Impact of Coronavirus (COVID-19) Survey

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

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.

More information on the strengths and limitations of the BICS data is available in the “Strengths and limitations” section of the Coronavirus and the economic impacts on the UK bulletin.

Social impact of coronavirus (COVID-19) (OPN)

More information on the strengths and limitations of the OPN Survey is available in the “Strengths and limitations” section of the Coronavirus and the social impacts on Great Britain bulletin.

Online price change for high-demand products (HDP)

These experimental online price changes data should not be compared with the headline Consumer Prices Index including owner occupiers’ housing costs (CPIH). The CPIH is produced using different methods, data and quality thresholds, and incorporates a broader range of goods and services, such as housing.

More information on the strengths and limitations of the online price changes data is available in the Online price changes of high-demand products methodology.

Publication of coronavirus (COVID-19)-related data

We will publish this bulletin on a weekly basis during the coronavirus (COVID-19) pandemic. 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.

This publication will include regularly updated data from the new fortnightly survey, BICS, online prices for high-demand products and weekly indicators from the OPN Survey on social impact of the coronavirus.