Business Insights And Impact On The UK Economy

19th November 2021

The percentage of currently trading businesses has fallen slightly from 93% in late October 2021, to 91% in early November 2021; this is the first time the figure had fallen since January 2021 and is primarily led by the transportation and storage industry.

Over a quarter (28%) of businesses currently trading reported a decrease in turnover compared with normal expectations for this time of year; this is up from 24% in late September 2021, and is the highest percentage since early August 2021.

Of businesses not permanently stopped trading, 6% reported no or low confidence that they would survive the next 3 months, which compares with 4% reported in early October 2021; the figure was highest (13%) for businesses in the other service activities industry.

Three-quarters (75%) of importing businesses that reported how their importing had been affected experienced a challenge importing in late October to early November 2021, up from 60% in late September 2021; a change in reference period for the question may have impacted responses.

Approximately one in six (17%) of the workforce were estimated to be using a hybrid model of working in late October; this increased to over a fifth (21%) of the workforce in businesses with 100 employees or more.

In early November 2021, half of businesses not permanently stopped trading reported that their workforce had already returned to their normal place of work; in contrast, 1 in 11 businesses do not expect their workforce to return to their normal place of work.

Trading status
The percentage of businesses currently trading has fallen slightly from 93% in late October 2021, to 91% in early November 2021; this is the first time this has fallen since January 2021. Meanwhile, the percentage of businesses temporarily closed or paused trading increased from 4% to 5% over the same period. The drop in the percentage of businesses currently trading is primarily led by the transportation and storage industry, which reported a 20-percentage point decrease in currently trading. The proportion of fully trading decreased 4 percentage points and partially trading decreased 16 percentage points.

Financial performance
Businesses currently trading were asked how their turnover for the last month compared with normal expectations for this time of year:

28% of businesses reported a decrease in turnover compared with normal expectations for this time of year; this is up from 24% in early October 2021 and is the highest percentage since early August 2021.

7% of businesses reported an increase in turnover compared with normal expectations for this time of year, compared with 8% in early October.

51% of businesses reported no effect to turnover compared with normal expectations for this time of year; this is down from 54% in early October2021 and is now broadly in line with early September 2021.

In early November 2021, 48% of businesses in the other service activities industry reported to have experienced a decrease in turnover in the last month compared with normal expectations for this time of year. This compares with 50% in late September 2021. This high percentage is partly primarily led by the hairdressing and other beauty treatment sub-industry.

The arts, entertainment and recreation industry reported the second largest proportion of business's who experienced a decrease in turnover in the last month, rising from 29% in early October 2021 to 44% in early November 2021. This was primarily led by a reported fall in turnover within the activities of sport clubs sub-industry.

The real estate activities industry reported the largest percentage seeing no effect on turnover, at 70%, down from 77% in late September 2021. This was followed by the information and communication industry, at 63%, and the human health and social work activities, at 57%; these compare with 68% and 64% respectively in late September 2021.

Business survival confidence
Of all businesses not permanently stopped trading, 6% of businesses reported they have low or no confidence they would survive the next 3 months; this compares with 4% reported in early October 2021. In early November 2021, 13% of businesses in the other service activities industry reported they have low or no confidence they would survive the next 3 months. This is up from 4% in early October.

In contrast, 54% of businesses not permanently stopped trading reported high confidence they would survive the next 3 months, while 31% reported a moderate confidence. The remainder reported they were not sure.

Of businesses not permanently stopped trading, 4% reported they had low or no confidence they will meet their current debt obligations. The proportion that reported a high or moderate confidence was 47%, while 8% reported they were unsure, and the remaining 42% reported they do not have any debt obligations.

The accommodation and food service activities industry reported the highest percentage of businesses with a high or moderate confidence of meeting its current debt obligations, at 60%. This was followed by the wholesale and retail trade; repair of motor vehicles and motorcycles industry, at 59%. As well as indicating high or moderate confidence of meeting current debt obligations, these industries also reported a high or moderate confidence to survive the next three months, at 80% and 87% respectively. In contrast 73% of businesses in the other service activities industry reported high or moderate confidence to survive the next three months, while 13% of these businesses reported having low or no confidence of meeting their current debt obligations.

Workforce status
The proportion of the workforce estimated to be working from a designated workspace in the last two weeks was 61%, while 12% were estimated to be working from home. Approximately one in six employees (17%) of all not permanently stopped trading businesses were estimated to be using a hybrid model of working; this increased to nearly one in five employees (19%) when excluding businesses with 0 to 9 employees.

In late October 2021, businesses reported less than 1% of their workforce were on sick leave or not working because of coronavirus, self-isolation or quarantine. This proportion has remained stable since comparable estimates began in June 2020.

Future of homeworking
Businesses were asked about the extent, and their expectations, of employees returning to their normal place of work.

Of businesses not permanently stopped trading, approximately half reported that their workforce had already returned to their normal place of work and around one-third reported they were either not sure or the question was not applicable to them.

f all businesses not permanently stopped trading, 50% of businesses reported their workforce had already returned to their normal place of work in early November 2021; this has increased from 34% in early September 2021 and from 20% in late April 2021, when the question was introduced.

In contrast, across all businesses not permanently stopped trading, 9% of businesses did not expect their workforce to return to their normal place of work, an increase from 4% in early September 2021.

In addition, businesses also reported on the timeframe they expect their workforce to return to their normal place of work:

within the next month - 2%
between 1 and 3 months - 3%
between 4 and 6 months - 2%
more than 6 months - 2%
The remainder were either not sure or the question was not applicable to them.

Businesses that selected a timeframe for their workforce to return to their normal place of work were also asked what proportion of the workforce they expect to return to work within that timeframe:

more than half (51%) expect above 75% of the workforce to return to their normal place of work
13% expect between 50% and 75% of the workforce to return
12% expect between 25% and 49% of the workforce to return
10% expect less than 25% of their workforce to return
14% reported they were not sure

Data on full industry breakdowns are available in the accompanying dataset.

Businesses were also asked if they were using or intending to use increased homeworking as a permanent business model going forward, and their reasons for either doing so or not doing so.

The information and communication industry reported the highest percentage of all businesses intending to use increased homeworking as a permanent business model, at 51%. In contrast, the other service activities industry reported the highest percentage for not intending to use increased homeworking as a permanent business model, at 65%.

The reasons reported by businesses who indicated they planned to use an increased homeworking model going forward in early November 2021, compared with late October 2021 were:

improved staff wellbeing - 65% (up from 63%)
increased productivity – 53% (up from 45%)
reduced overheads –53% (up from 49%)
reduced carbon emissions – 43% (up from 34%)
ability to recruit from a wider geographical pool in the UK – 23% (up from 22%)
reduced sickness absence – 17% (up from 13%)
ability to better match jobs to skills – 15% (unchanged)
ability to recruit from a wider geographical pool internationally – 13% (unchanged)
reduced wage bill – 4% (unchanged)
5% of businesses were not sure if they would use a homeworking model, down from 8% in early October.

The top three reasons reported by businesses who indicated they did not plan to use an increased homeworking model in early November 2021, compared with early October 2021 were:

not suitable for our business – 90% (up from 89%)
negative impact on working culture – 9% (up from 6%)
reduced communication – 9% (up from 6%)
Businesses in the accommodation and food service activities industry and the wholesale and retail trade; repair of motor vehicles and motorcycles industry reported that an increased homeworking model was not suitable for their businesses at 100% and 93%, respectively.

Read the full report at
https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/businessinsightsandimpactontheukeconomy/18november2021