Business turnover weakened across most sectors in January as lockdown restrictions were introduced.
Monthly Business Turnover Index
- The Monthly Business Turnover Index for January showed that most companies in Scotland continued to report that turnover was lower compared to last year (38.5). Furthermore the indicator weakened over the month to its lowest level since August 2020 signalling that sales have fallen and cash flow risks are potentially rising.
- Compared to the previous year, business turnover remained lower in the Services sector (37.5), and in the Manufacturing sector, though to a lesser extent (44.8). Within the Services sector, Accommodation and Food Services continued to be the industry with the largest decrease in turnover over the year (12.4), followed by Culture and Recreation Services (19.9) and non-food retail (20.4), reflecting sectors most directly impacted by lockdown restrictions.
- More recent Scottish Government estimates of ONS BICS data suggest that some of the sector differences in business turnover have continued into February.
- Overall, 45% of businesses reported having lower turnover than normal for the time of year. The Accommodation and Food services sector has the highest proportion of firms (84%) reporting that business turnover is lower followed by Wholesale, retail, and repair of vehicles (54%).
- Furthermore, business resilience remains a key factor as restrictions on activity remain in place. The same survey showed that in February and into the start of March, 30% of firms reported having no, or less than 3-months' of cash reserves, while 17% reported a severe or moderate risk of insolvency. In both cases, Accommodation and Food Services was the sector with the highest rates (57% and 37% respectively).