The latest figures from the Office of National Statistics (ONS) show the sectors struggling to survive due to impacts of coronavirus. Trading and turnover figures show 6% of companies permanently ceased trading in October.
The twice-monthly data update from ONS shows the Transportation and Storage industry to have been hardest hit, with 12% of companies permanently closing during October. The Administrative and Support Service sector, which accounts for cleaning companies, has also been badly impacted seeing 10% of companies cease trading.
Disruptions to trading
On average, 21% of businesses operating in the UK have reported some level of trade disruption. Despite the pandemic requiring more rigorous cleaning procedures, the BICS report shows that 31% of businesses in the cleaning industry have seen trade negatively affected by coronavirus.
Across the board, SME businesses with nine or less employees have been hardest hit, with 14% reporting that they’re unable to trade due to the impacts of COVID-19 and are unlikely to resume trading in the coming weeks.
Further disruptions to trading show half of all businesses reporting increased financial losses due to coronavirus. And this pattern holds true for the cleaning sector where over 53% of businesses have seen a decrease in turnover for this time of year.
One-third of all businesses say that turnover has remained the same as pre-COVID levels.
In terms of suppliers of trade goods, 18% have had to change suppliers or find alternative solutions to get materials, goods or services needed to operate, showing that the disruption caused by the pandemic is affecting supply chains and the ability for businesses to deliver core activities as usual.
Workforce on furlough
Current furlough figures show that 9% of the UK workforce are currently on furlough, compared to a previous 8%.
With some pubs and restaurants expected to reopen for weeks in December, the hospitality industry can expect to see 30% of staff returning to the workplace. Though for Administrative and Support Services, Arts, Entertainment and Recreation sectors, significantly less staff are expected to be back to work normality, leaving furlough schemes in place.
According to Savill’s, the nation-wide lockdown in Q2 of this year saw many offices temporarily shut down, with some companies opting to keep employees working from home for the foreseeable future.
With office space not in usual use, the need for commercial cleaners has dropped causing major effects on these businesses.
The number of office spaces left empty will have been further compounded by Government advice to ‘work from home if you can effectively do so’ in England, encouraging a shift to remote working for office workers.
There is evidence in London of empty office hotspots. Savill’s found a dramatic 50% decrease in office space uptake in The City of London alone. And, likely as a consequence, cleaning companies in London have been the most likely in the UK to cease trading.
Additional effects from coronavirus see 11% of staff in the sector remaining on furlough whilst just 69% of businesses remain fully operational.
Signals of recovery
While the impact of the coronavirus pandemic has clearly taken a toll on businesses across the UK, there are signs of recovery. 14% of the workforce are expected to have returned to their usual workplace, either from furlough or remote working.
Although now the government has announced the reintroduction of the tier system from 3 December, the amount of people returning to their usual workplace is likely to be impacted, as official advice is still to work from home if you can.
Savill’s also reports an uptick in office premise demand in London and the South East, signalling that some businesses are intending to return to traditional office spaces in 2021. As businesses begin to return to their usual workplaces, it is likely that there will be an upturn in the demand for commercial cleaning services once again.