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Measuring the effects of COVID-19 on businesses and the economy

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Since 2016, the ESRC-funded Decision Maker Panel (DMP) has been surveying thousands of businesses each month on the uncertainties they face.

When COVID-19 emerged, the team behind the panel quickly adapted to ask leaders how the pandemic was affecting their business.

Since February 2020, data from the Decision Maker Panel has been used to brief the UK government, treasury, banks and other policymakers.

“We thought Brexit was a big shock for UK businesses, but COVID has been much greater”, says Professor Paul Mizen, principal investigator of the DMP.

What is the DMP?

The DMP comprises financial officers from small to large UK companies operating in a broad range of industries; it is designed to represent the UK’s business landscape.

It was established to collect more detailed information on business expectations than was available from other sources. The results help inform the Bank of England’s policies and help the government assess the prospects of the UK economy.

Mizen says:

At heart, the DMP helps assess the links between uncertainty and company behaviour. We monitor firms’ future expectations and associated uncertainties regarding changes in their prices, level of employment, capital investment and sales revenue. Each month, questions focus on one or more of these topics on a rotating basis.

There’s nothing else like the DMP; we ask about the future, about how companies are planning for one, two or three years ahead. We don’t simply report that exports went down last month.

How are UK businesses responding to COVID-19?

The DMP pivoted its questions to COVID-19 after the pandemic began. Each month, the DMP has been asking UK businesses of all sizes and sectors about the impact of the pandemic. The panel has been asked how many employees have been furloughed, how many people are working from home and what effect the pandemic has had on costs.

Mizen explains:

Each month, results from the DMP are sent to policymakers within days of being collected; our data has been used by the Bank of England as well as Number 10. It gives them immediate access to data, which can be broken down by region, sector and size of business.

The questions have changed over time, and so have the responses. In late March to early April, 80% of firms said COVID-19 was their biggest source of uncertainty; by September that had dropped to under 50%.

The Decision Maker Panel provides policymakers with invaluable information about uncertainty. If businesses face uncertain futures they may pause projects, spend less, make redundancies or change employment patterns.

Since its inception, over 8,000 executives across the UK have participated in the DMP. The team regularly publishes reports, including on the impact of COVID-19.

The DMP is funded by ESRC, the Bank of England, the University of Nottingham and Stanford University.

Last updated: 16 November 2020

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