3rd July 2020 by Phil Mundy
I have produced this series of documents to help people understand the situation beyond their local environment, to highlight fundamental difficulties faced by businesses during and post lockdown.
This is my third article containing a focused 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 used this information in a recent seminar I gave to Portsmouth companies on “Business recovery by thinking like a startup”. The charts provide a quick overview of the major industries and markets and are more useful than incomplete and misused statistics headlining in reputable financial media.
The Business Impact of COVID survey (Ref. ONS1) is released every two weeks; this post covers business activity between 1st and 14th June, and the previous post covers the period from 18th and 31st May.
Analysis and commentary are kept to a low level for the sake of brevity. 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 84% trading), and the overall number of companies responding as permanently closed in the two weeks remains <1% and too small to show on the chart. However, the summary figures mask approximately 2% of companies (with >250 employees) in both Human Health and Transport & Storage reported as permanently closing.
There wasn’t a big change across the board. Accommodation and food was a notable improver, reopening to prepare and restock for the relaxation in lockdown rules. Note that businesses were asked for their trading status for period 15 June to 28 June 2020, not the reference period 1 June to 14 June 2020.
Looking forward into the following two weeks, 43% Acc. and Food, 45% Arts, Ents. and Rec., and 9% Admin paused businesses expected to restart.
The rush to furlough workers to protect future furlough capability seems to have halted, and the net figures have started to improve again, albeit slowly. ‘Wholesale, retail’ were amongst the improvers in the run-up to shops reopening due on Jun 15th. Other than that, there’s not a great deal of good news for business operations who cannot be fully active with a large number of missing workers.
Comparing the turnover of businesses that were open during the survey period against that normally expected, not a great deal has changed between this and the previous survey. Many companies are still operating at significantly lower turnover levels, presumably propped up by the government support packages and other loans.
However, the results are marginally better than the previous survey, and some businesses in all sectors have continued to carve a larger slice of the market for themselves, declaring an above-normal turnover.
A significant number of businesses were still operating or paused with less than three months of spare cash at their current operating levels, and there was a slight increase in the worst categories with no, or, one month of cash. The customer acquisition time for many restarting businesses will eat into this cash-buffer 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 safely invest in lead generation and growth.
My advice hasn’t changed over the last six weeks, manage your cash, invest in your marketing and sales teams to re-learn your market, and re-evaluate and innovate across your whole customer journey process, and supply chain; this is a whole-business and system problem, including the chain of suppliers and consumers. People are more likely to accept and work with changes right now, and there will be changes that benefit your business and those you work with.
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.
What statistics are you interested in? Let me know, and I will see if I can add them to the updates.emailLet’s talk business
Business Impact of Coronavirus (COVID-19) Survey questions: 1 June to 14 June 2020
BICS Wave 7: 1 June to 14 June 2020
Coronavirus and the economic impacts on the UK: 18 June 2020