UK Business Insights: Challenges and Impact on Economy – January 4, 2024

The latest release of the Business Insights and Conditions Survey (BICS) provides valuable information on the challenges faced by UK businesses and their impact on the economy. Conducted through a voluntary fortnightly survey, the BICS captures real-time data on financial performance, workforce, trade, and business resilience. Here are the key findings from Wave 98, conducted from December 11 to December 24, 2023:

  1. Supply Chain Resilience:
    • In November 2023, 73% of trading businesses with 10 or more employees reported obtaining materials, goods, or services from within the UK without disruption, showing a 6 percentage point increase from October 2023.
    • Approximately 1 in 9 businesses (12%) faced challenges in sourcing materials within the UK or had to explore alternative solutions, maintaining stability from the previous month.
  2. Global Supply Chain Disruption:
    • In November 2023, 5% of businesses with 10 or more employees experienced global supply chain disruption, with 27% attributing the disruption to a shortage of materials.
  3. Artificial Intelligence Adoption:
    • As of mid-December 2023, 85% of businesses reported not using artificial intelligence (AI), with 83% having no plans to adopt AI in the next three months. These figures remained stable compared to late September 2023.
  4. Worker Shortages:
    • Less than 1 in 10 businesses (9%) experienced worker shortages in mid-December 2023, with 43% of them unable to meet demands as a result. These figures remained broadly stable from late November 2023.
  5. Wage Changes:
    • In November 2023, 7% of businesses reported an increase in employee hourly wages compared to October 2023, while 81% reported no change.
  6. Industrial Action:
    • Approximately 4% of businesses were affected by industrial action in November 2023, the lowest proportion since this question was introduced in June 2022. Among affected businesses, almost a third (32%) reported a change in their workforce’s working location.

Key Trading Figures (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.

The BICS provides a crucial snapshot of the challenges and dynamics within the UK business landscape, offering insights for policymakers and businesses alike. The next release is scheduled for January 11, 2024.