BCC QES Q3: 46% of firms report UK sales decrease

The British Chambers of Commerce’s Quarterly Economic Survey (QES) – the UK’s largest independent survey of business sentiment and a leading indicator of UK GDP growth – found that business conditions remained weak in the third quarter of 2020, despite much of the economy reopening. 

The survey of 6,410 firms, employing over 580,000 people across the UK, revealed that, while key indicators have improved from historic lows in Q2, they remain significantly lower than before the pandemic struck. Business to consumer firms, including hospitality, fared worst.

Key findings:

– Almost half (46%) of firms reported a decrease in domestic sales, while just 27% reported an increase on the previous quarter

– Two-thirds (66%) of respondents in hospitality and catering saw decreases in sales and bookings

– Indicators, including cash flow, remain at levels comparable to the 2008-09 recession for firms in the services sector

Business conditions  

Overall, while this quarter has seen an improvement compared to the unprecedented percentage of firms reporting decreases in domestic and export sales in Q2, the majority of firms continue to report decreases or no change in sales in Q3.

– Nearly half of firms (46%) reported decreases in domestic sales, down from 73% in Q2.

– 27% of firms reported an increase in domestic sales. 27% reported no change

– 47% of firms reported decreases in export sales, down from 72% in Q2 but still substantially worse than Q1, where only 21% of firms reported a decrease

– Nearly a quarter (24%) of firms reported increases in export sales, up from 9% in Q2

Business to consumer (B2C) firms, particularly those from the hospitality and catering sectors, saw the weakest performance, with two-thirds (66%) of respondents in hospitality and catering reporting decreases in sales and bookings in the last three months, compared with 46% overall.

In the services sector, the balance of firms reporting increased domestic sales increased to -25% in Q3 2020, up from -64% in Q2. The balance of firms reporting increased export sales increased to -31% in Q3 from -55% in Q2.

In the manufacturing sector, the balance of firms reporting increased domestic sales increased to -15% in Q3 2020, up from -59% in Q2 2020. The balance of firms reporting increased export sales increased to -26% from -52% in Q2.