Monthly Decision Maker Panel data - December 2020

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.
Published on 07 January 2021

The November DMP survey was conducted between 4 and 18 December and received 2,933 responses.

In December, businesses estimated that their sales in 2020 Q4 would be 16% lower than they otherwise would have been because of Covid-19, with employment 8% lower and investment 20% lower.

The impact of Covid-19 on sales was expected to ease from -16% in 2020 Q4 to -14% in 2021 Q1 and -9% in 2021 Q2. But sales expectations were revised down in December for both 2021 Q1 and Q2, by 3 percentage points and 7 percentage points respectively. This brings sales expectations largely back in line with results from the October survey, following a more positive outlook in the November survey. The December fieldwork was carried out prior to the tier 4 announcement on 19 December for South East England, including London, but it was carried out against a backdrop of rising cases following the end of the November lockdown.

Businesses also expected the effects of Covid-19 on employment and investment to gradually lessen during the first half of 2021. The impact on employment was expected to be -7% in 2021 Q1 and -5% in 2021 Q2, compared to -8% in 2020 Q4. Employment expectations in the December survey were more pessimistic than in November.  The impact on investment was expected to be -17% in 2021 Q1 and -11% in 2021 Q2, compared to -20% in 2020 Q4.

The percentage of employees on furlough (still employed but not required to work any hours) decreased to 8% in December, down from 11% in November following the end of the second lockdown.

Overall uncertainty remained high in December, with little change from November. The percentage of businesses that viewed overall economic uncertainty as high or very high rose marginally from 67% to 68% in December, and remains much higher than 41% at the start of 2020.

In the December survey, businesses reported an increase in the level of preparedness for the end of the transition period with the EU. Excluding firms who do not trade with the EU (14%), 6% reported that they were fully prepared, 71% were ‘as ready as they can be’, 22% were partially prepared and 2% were not all prepared. The percentage reporting that they were either fully ready or as ready as they can be increased from 68% to 76% in December, continuing the upward trend from 55% in October. The December survey was carried out prior to the announcement of a Brexit deal.

The DMP was set up in August 2016 by the Bank of England together 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. See Bloom et al (2017) for more details.

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