Monthly Decision Maker Panel data - November 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 03 December 2020

The November DMP survey was conducted between 6 and 20 November and received 2,964 responses.

In November, businesses estimated that their sales in 2020 Q4 would be 15% lower than they otherwise would have been because of Covid-19, with employment 6% lower and investment 25% lower.

Sales were expected to rebound over the next few quarters. The impact of Covid-19 on sales was expected to ease from -15% in 2020 Q4 to -11% in 2021 Q1 and -2% in 2021 Q2. The expected impact of Covid-19 on sales in 2020 Q4 was unchanged on the previous month, but expectations were revised up by 3 percentage points for 2021 Q1 and 6 percentage points for 2021 Q2. The sample period included the announcement of positive vaccine news from Pfizer and Moderna, on 9 November and 16 November respectively.

Businesses were also less pessimistic about the impact of Covid-19 on employment in the latest survey. In the November survey, employment was expected to be 6% lower than it otherwise would have been in 2020 Q4 and 2021 Q1, compared to -8% and -9% respectively in the October survey. The expected effect on employment in 2021 Q2 was -3%, up from -7% in the October survey.

The percentage of employees on furlough (still employed but not required to work any hours) increased in November to 11%, up from 5% in October but still well below the peak of 37% in April.

Businesses expected 2020 Q4 investment to be 25% lower than it would have been due to Covid-19, a 5 percentage point decline on October expectations. 2021 Q1 investment expectations were also revised down to -22%, but 2021 Q2 expectations were unchanged at -11%.

The November DMP survey also asked businesses about how they expect Covid-19 to affect them over 2022 and beyond. The effects on sales and employment were expected to be small, less than 1%, whilst investment was expected to be around 3% lower.

Overall uncertainty fell back but remained high in November. 67% of businesses viewed overall economic uncertainty as high or very high. This was lower than 75% in the October survey, but much higher than 41% at the start of the year. Covid-19 remained the largest source of uncertainty for 44% of businesses, and in the top three sources for 85%, similar to previous months.

In the November 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 (18%), 6% reported that they were fully prepared, 62% were ‘as ready as they can be’, 27% were partially prepared and 4% were not all prepared. In October, 55% of firms that trade with the EU reported being either fully prepared or ‘as ready as can be’.

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.