UK Business Insights: January 4, 2024

The latest release of the Business Insights and Conditions Survey (BICS) sheds light on the challenges faced by UK businesses, providing real-time information on critical factors affecting the economy. Here are the key points from the January 4, 2024 release:

  1. Supply Chain Resilience:
    • In November 2023, 73% of trading businesses with 10 or more employees reported seamless access to materials, goods, or services within the UK, up by 6 percentage points from October.
    • Approximately 12% faced disruptions, requiring a change of suppliers or alternative solutions, a figure that remained stable.
  2. Global Supply Chain Disruption:
    • In November 2023, 5% of businesses with 10 or more employees experienced disruptions in the global supply chain.
    • Of those affected, 27% reported a shortage of materials as the primary reason for disruption.
  3. Artificial Intelligence (AI) Adoption:
    • In mid-December 2023, 85% of businesses reported not using AI, and 83% had no plans to adopt AI within the next three months.
    • These figures remained broadly stable compared to late September 2023.
  4. Worker Shortages and Wage Trends:
    • Less than 10% of businesses experienced worker shortages in mid-December 2023, with 43% reporting an inability to meet demands.
    • Only 7% reported an increase in employee hourly wages in November 2023 compared to October, while 81% reported stable wages.
  5. Industrial Action:
    • Approximately 4% of businesses were affected by industrial action in November 2023, marking the lowest proportion since June 2022.
    • Among affected businesses, 32% reported a change in their workforce’s working location.
  6. Business Trading Status:
    • In mid-December 2023, 95% of businesses reported trading, with 87% fully trading and 9% partially trading.
    • 3% temporarily paused trading, and 2% permanently ceased trading.

Commentary: The data reflects the resilience of UK businesses amid challenges, with improvements in supply chain dynamics and stability in key economic indicators. The ongoing low adoption of AI and the cautious wage trends underscore the nuanced recovery in the business landscape.