18th June 2020 by Phil Mundy
I have produced this document to help people understand the situation beyond their local environment, to highlight fundamental difficulties, and show that there are survivors amongst the chaos. This is my second article containing a focussed view of business activity during the COVID crisis created from the much longer and detailed survey data issued by the Office of National Statistics (ONS).
I started producing these charts to provide businesses with a quick view of their industry and markets after seeing incomplete and misused statistics headlining in reputable financial media, and they were used in a recent seminar I gave to Portsmouth companies on “Business recovery by thinking like a startup”.
The Business Impact of COVID survey (Ref. ONS1) is released every two weeks; this post covers business activity between 18th and 31st May, and the previous post covers the period from 4th to 17th May.
Analysis and commentary have been kept to a low level for the sake of brevity, and if you are interested in digging deeper yourself, you will find the references to data sources at the bottom of the article (Ref. ONS1, ONS2, ONS3).
Please note, these results do not infer the total impact to the UK economy; the results are per company, and are not weighted to reflect the size of the workforce or turnover affected.
Don’t forget you can click on the charts to obtain specific values.
There was only a marginal change in trading status compared to the previous survey (was 82% trading), and the number of companies responding as permanently closed in the 2 weeks remains <1% and too small to be worth showing on the chart.
Wholesale and Retail; Construction; Accommodation and Food; and Arts, Entertainment and Recreation were the only areas to show an increase in the percentage of companies paused (by up to 5%), inferring a continued weakening of those industries.
The total percentage of the workforce on furlough rose compared to the previous two weeks. This rise was counter to the expectation expressed by businesses expecting to decrease the number furloughed and driven by Accommodation and Food, and Arts and entertainment furloughing more staff.
There were no big improvers with the most significant positive change in the Water supply and waste management industry with 4% fewer workers furloughed. At these levels, this still looks like “business as unusual” for internal processes, and external-facing marketing & sales activities.
There is an enormous imbalance in performance across industry and companies shown by the left-heavy balance of the chart below.
I have discussed this with a broad range of businesses, and the implications of vary widely; every business needs to look at its position and potential. For companies that are not entirely locked out by restrictions, there are opportunities for those that can overcome the constraints and communications difficulties caused by the current situation.
A significant number of all businesses were operating or paused with less than three months of spare cash at their current operating levels. The customer acquisition time for many many will eat into this significantly and I highly recommend businesses drawing up sales targets and monitoring their status against cash flow forecasts with regular reviews.
I hope the other companies that are still responding with ‘don’t know’ are cash-rich and can afford not to know, because this doesn’t make sense in the current climate from a survival perspective, or having the ability to invest in lead generation safely.
My advice hasn’t changed over the last two weeks, manage your cash, invest in your marketing and sales teams to re-learn your market, and re-evaluate your whole customer journey process and supply chain; this is a whole-business problem. People are more likely to accept and work with changes right now, and there will be changes that benefit your business. My opinion is still that doing nothing is not a good option for any business.
I help businesses understand their situation, generate options for action, and use the resources they have to overcome their challenges; if this article has raised any questions, or you would like to take up my offer of an hour to talk through your situation, you are very welcome to get in touch.
I will be posting bi-weekly updates as new survey data is released. If you want a heads-up email send me a request using the contact button below and I’ll send you an email notification.
emailLet’s talk businessONS1:
Business Impact of Coronavirus (COVID-19) Survey questions: 18 May to 31 May 2020
https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/conditionsanddiseases/articles/businessimpactofcovid19surveyquestions/18mayto31may2020
ONS2:
BICS Wave 6: 18 May to 31 May 2020
https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/businessimpactofcovid19surveybicsresults
ONS3:
Coronavirus and the economic impacts on the UK: 18 June 2020
https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/coronavirusandtheeconomicimpactsontheuk/18june2020