Latest results from the Decision Maker Panel survey - 2020 Q2

The Decision Maker Panel (DMP) is a survey of Chief Financial Officers from small, medium and large UK businesses. We use it to monitor developments in the economy and to track businesses’ views. This is a summary of the results up until May 2020.
Published on 18 June 2020

Expected impact of Covid-19 on UK businesses

The spread of coronavirus (Covid-19) was expected to have a large impact on UK businesses in 2020 Q2. In the May DMP survey, firms expected their sales in 2020 Q2, on average, to be 42% lower due to Covid-19 compared with what they would normally have expected, employment to be 6% lower and investment to be 43% lower (Chart 1). The sales and investment impacts were a little smaller than in the April survey (where they were 44% and 50% respectively). And the employment impact in 2020 Q2 was materially smaller than in the April survey (a fall of 6% vs 18%). That possibly reflects the extension of the Government’s Job Retention Scheme, which was only due to run until May at the time of April survey. The percentage of furloughed employees was reported to be around 35% in both the April and May surveys.

The May survey asked businesses about their expectations for the impact of Covid-19 over the next year as well as in Q2. A gradual recovery in sales was expected over the next year but some of the effects of Covid-19 were likely to be persistent. The negative impact of coronavirus on sales was expected to decline from around 40% in Q2 to around 30% in Q3, around 20% in Q4 and around 10% in Q1 of next year (Chart 1). Investment was expected to recover more slowly than sales and to be around 20% below what it would have been in Q1 of next year. The impact on employment was expected to be larger in the second half of this year than in Q2, with the biggest impact expected to be around -10% in Q4.

Chart 1 Covid-19 was expected to have a large impact on firms’ sales, employment and investment over the next year (a)

(a) The results are based on the questions ‘Relative to what would otherwise have happened, what is your best estimate for the impact of the spread of coronavirus (Covid-19) on the sales, employment and capital expenditure of your business in each of the following periods?’ Respondents provided their expected impacts for 2020 Q2, 2020 Q3, 2020 Q4 and 2021 Q1.

Sectoral analysis

The impact of Covid-19 was expected to be substantial across all sectors, but highly consumer-facing businesses expected to be most severely affected.

The analysis in this section divides firms into four groups based on the nature of the industry that they are in: highly consumer-facing non-essential services – including firms from non-food retail, accommodation and food and recreational services sectors; less consumer-facing non-essential services – for example, companies in finance and real estate, professional services and information and communication; non-food manufacturing and construction; and businesses involved in the provision of essential services – food manufacturing and distribution, utilities and healthcare.

Chart 2 highlights how highly consumer-facing services expected the biggest falls in sales in Q2, in the region of 60% (shown by the red bars). Non-food manufacturing and construction was the next most affected sector with sales expected to fall by an average of around 45% (the dark brown bars) followed by less consumer-facing services (blue bars, a 30% fall in sales). Essential services expected the smallest impact on sales in Q2 (shown by the light brown bars).

Chart 2 Largest sales impacts in 2020 Q2 were expected in highly consumer-facing services (a)

(a) See footnote for Chart 1.

Some recovery in sales was expected for all sectors over the next year, although sales were expected to remain below normal in 2021 Q1, particularly in the highly consumer-facing services sector (Chart 3). By Q1 of next year, sales in the consumer-facing services sector were expected to still be about 16% below what they would normally have been. In other sectors, sales were expected to recover to closer to normal: by Q1, sales were expected to be around 8% lower, on average.

Chart 3 Sales impacts expected to remain largest in consumer-facing industries over the next year (a)

(a) See footnote for Chart 1.

Alongside a reduction in sales, firms across all sectors expected Covid-19 to reduce capital expenditure over the next year. Businesses providing highly consumer-facing services reported that they expected the largest hits to investment (Chart 4), consistent with the sector expecting to experience the largest and most persistent impact on sales.

Chart 4 All sectors expected persistently lower investment, but particularly consumer-facing sectors (a)

(a) See footnote for Chart 1.

Businesses in highly consumer-facing industries also expected the largest reduction in employment over the next year (Chart 5). While all sectors reported a material reduction in employment in 2020 Q2 of around 5% or just above, there was more divergence in expectations over the second half of the year. In particular, highly consumer-facing firms expected to make further substantial cuts in employment during this period while changes in other sectors were expected to be more modest.

Chart 5 Consumer-facing sectors also expected to make the largest cuts in employment, particularly in the second half of the year (a)

(a) See footnote for Chart 1.

Consumer-facing firms had also reported placing the largest share of their employees on furlough in May. Around 60% of employees in firms in that sector were reported to be on furlough (Chart 6). As a result, the phasing out of the Government’s Job Retention Scheme (where employers have to make additional contributions from August before the scheme closes at the end of October) might be a factor accounting for why employment was expected to fall further in the second half of the year for these firms.

Chart 6 Consumer-facing industries also had a high proportion of their employees furloughed (a)

(a) The results are based on the question ‘Approximately what percentage of your employees fall into the following categories as of May 2020? (i) Still employed but not required to work any hours (eg ‘on furlough’), (ii) Unable to work (eg due to sickness, self-isolation, childcare etc.), (iii) Continuing to work on business premises, (iv) Continuing to work from home’.


In the May survey, firms reported that the spread of Covid-19 remained a major source of uncertainty for most UK businesses, although uncertainty fell back a little from April. In May, 79% of firms viewed Covid-19 as the top source of uncertainty for their business, down from 86% a month before. 95% of firms thought that Covid-19 was in their top three sources of uncertainty in May. The percentage of businesses reporting that overall uncertainty was high or very high remained well above the values recorded in February and March (blue line in Chart 7), although it was also slightly down in May compared to April (from 84% to 76%). A similar pattern was evident from firms’ uncertainty around their year-ahead sales expectations (pink line in Chart 7).

Chart 7 Measures of uncertainty fell back slightly in May, but remained high (a)

(a) Uncertainty around year-ahead sales growth data are average standard deviations around expected year-ahead sales growth. This is derived from a question asking respondents to attach probabilities to five different possible outcomes for year-ahead sales growth in their business. The five outcomes are chosen by the respondent. The overall uncertainty data are based on the question ‘How would you rate the overall uncertainty facing your business at the moment? (i) Very high – very hard to forecast future sales, (ii) High – hard to forecast future sales, (iii) Medium – future sales can be approximately forecasted, (iv) Low – future sales can be accurately forecasted, (v) Very low – future sales can be very accurately forecasted’.

Firms expected uncertainty to be persistent in the May survey, and more so than in April. In April, around 70% of respondents thought that Covid-induced uncertainty would be resolved before the end of this year (Chart 8). By May, this proportion had fallen to around 30% with almost half thinking it will take until at least the second quarter of 2021.

Chart 8 Covid-related uncertainty expected to be more persistent (a)

(a) The results are based on the question ‘When do you think it is most likely that the coronavirus-related uncertainty facing your business will be resolved?’.


The DMP consists of the Chief Financial Officers of small, medium and large UK businesses operating in a broad range of industries.

We survey panel members to monitor developments in the UK economy and to track businesses’ views on them. This work complements the intelligence gathered by our Agents.

This note is a summary of surveys conducted with DMP members up to May 2020. The May survey was in the field between 7 and 22 May. In May, there were around 8,000 panel members and we got around 2,800 responses.

Further monthly data from the May survey for a limited number of DMP series was be published on 4 June 2020. Aggregate level data for all survey questions are published on a quarterly basis. Data from the February to April surveys were released on 7 May.

The panel was set up in August 2016 by the Bank of England and with academics from Stanford University and the University of Nottingham. It was designed to be representative of the population of UK businesses. All results are weighted using employment data. See Bloom et al (2017) for more details.

The DMP receives funding from the Economic and Social Research Council.