Monthly Decision Maker Panel data - December 2021

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 06 January 2022

The December DMP survey was conducted between 3 and 17 December and received 2,755 responses.

In the December survey, businesses estimated that their sales in 2021 Q4 would be 7% lower than they otherwise would have been because of Covid-19, with investment 11% lower and employment 5% lower.

In the latest survey, businesses’ near-term expectations for the impact of Covid on sales, employment and investment had deteriorated following the emergence of the Omicron variant. The impact of Covid on sales was expected to reach -7% in 2021 Q4, compared with -5% in the November survey. Businesses anticipated sales would continue to be 7% lower than in the absence of Covid in 2022 Q1, with this impact expected to ease to -4% in 2022 Q2, down from -4% and -2% respectively in November. 

In the December survey, Covid was expected to lower investment by 11% in 2021 Q4, compared with -8% in the November survey. Investment in 2022 Q1 was expected to be around 10% lower than in the absence of Covid, with this impact expected to ease to around -5% in 2022 Q2, significantly larger than the -2% and 0% impacts estimated in the November survey. 

Firms also reported worsening expectations for the impact of Covid on employment. Businesses expected employment to be 5% lower due to Covid in 2021 Q4, compared with -2% reported in the November survey. In December, firms expected the impact of Covid on employment to reach -4% in 2022 Q1 and -3% in 2022 Q2, down from -3% and -1% respectively in November. 

The percentage of workers on premises was reported to have fallen to 66% in December, down from 71% the previous month, following Government guidance on 13 December for workers across England to work from home where possible. Similar guidance was also issued for the rest of the UK. The share of workers who were unable to work (due to factors including sickness, self-isolation, and childcare) also rose in December to 4%, up from 3% in November. This was the highest level since the start of the pandemic.

In December, 86% of firms reported they were finding it harder than normal to recruit new employees, with 63% reporting it to be much harder, up slightly from 62% in the previous month. Firms reporting recruitment difficulties in December also saw higher rates of staff absences over the same period, potentially adding further to labour supply pressures. The percentage of non-labour inputs being disrupted fell slightly to 15% in December, from 16% in November. The proportion of firms suffering some form of disruption to their non-labour inputs remained stable at around two-thirds. 

Annual output price inflation continued to increase in the DMP, reaching 5% on average in the three months to December, up by 0.1 percentage point on November. Year-ahead annual output price inflation was expected to be 4.5% in the three months to December 2022, up from 4.2% in the November survey. 

Overall uncertainty remained stable in December, with the percentage of businesses that viewed the overall level of uncertainty facing their business as high or very high unchanged at 48%. However, Covid-related uncertainty increased in December, with 21% of firms reporting it as their top source of uncertainty, up from 12% in November. The share of firms that reported Brexit in their top three sources of uncertainty fell to 35% in December from 38% in November.

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.

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