Business Insights And Impact On The Uk Economy: 6 April 2023

7th April 2023

The impact of challenges facing the economy and other events on UK businesses. Based on responses from the voluntary fortnightly business survey (BICS) to deliver real-time information to help assess issues affecting UK businesses and economy, including financial performance, workforce, trade, and business resilience.

Latest results suggest business conditions continue to remain challenging, but estimates show small signs of positive improvement for some measures; examples include: a smaller proportion of businesses reporting supply chain disruption, more businesses reporting they were able to get materials, goods and services from within the UK, and fewer businesses reporting energy prices as their main concern.

In February 2023, one in nine (12%) businesses with 10 or more employees experienced global supply chain disruption; down from 20% in September 2022 and the lowest percentage reported since the question was introduced in December 2021.

More than two-thirds (67%) of trading businesses reported that they were able to get the materials, goods or services they needed from within the UK in February 2023; up 6 percentage points compared with January 2023.

Looking ahead to April 2023, approximately 7 in 10 (72%) businesses reported some form of concern for their business; the top two concerns reported by businesses continued to be energy prices (17%) and inflation of goods and services prices (16%).

In February 2023, approximately one in nine (12%) businesses were directly or indirectly affected by industrial action, with 3 in 10 (30%) of those businesses reporting that they were unable to fully operate as a consequence.

Around 1 in 12 (8%) businesses reported that their employees' hourly wages had increased in February 2023 compared with January 2023; this was 14% for businesses with 10 or more employees.

More than a quarter (28%) of businesses with 10 or more employees were experiencing worker shortages in late March 2023, though this figure has gradually fallen from 36% in late August 2022; nearly half (49%) of those businesses reporting worker shortages indicated that their employees were working increased hours as a consequence.

In late March 2023, the percentage of businesses that reported they were trading was 96%, with 86% fully trading and 10% partially trading (for example, trading with reduced hours or staff numbers). Meanwhile, 3% of businesses reported "temporarily paused trading" and 1% "permanently ceased trading" as their business's trading status.

Exporting and importing
Of currently trading businesses with 10 or more employees, 19% had exported and 24% imported in the last 12 months.

In February 2023, those businesses that had exported and/or imported in the last year were asked how their exporting and importing compared with February 2022, and which challenges they had experienced an increase in compared with the previous calendar month.

Business concerns
Businesses not permanently stopped trading were asked what their main concern for their business was when looking ahead to April 2023.

Businesses were asked for their main concern; this does not mean they do not have any other concerns for their business.

Looking ahead to April 2023, 72% of businesses have some form of business concern, with energy prices remaining the most commonly reported main concern at 17%.

Compared with concerns for January 2023, there was an increase in the proportion of businesses selecting taxation as their main concern in April 2023. In contrast, a lower proportion of businesses selected energy prices and falling demand for goods and services as their main concern.

When looking ahead to April 2023, 8% of businesses reported they have concerns about taxation. This is the highest reported percentage since the question was introduced in February 2022. The information and communication industry reported the highest percentage of businesses that are concerned about taxation, at 15%.

The accommodation and food service activities industry had the highest proportion of businesses reporting some form of concern at 92%. In contrast, the information and communication industry reported the lowest proportion of businesses reporting some form of concern, at 60%.

Worker shortages
Nearly half (44%) of businesses with 10 or more employees in the human health and social work activities industry reported a shortage of workers in late March 2023.

Of the 28% of businesses with 10 or more employees that were experiencing worker shortages, nearly half (49%) reported employees were working increased hours, while 40% of businesses were unable to meet demands.

Read the full report HERE