Record fall in business output as Government sets out plan to restart economy

12 May 2020

- Monthly decline in business output exceeds the cumulative falls seen throughout the global financial crisis
- Business confidence also drops to lowest level since records began 


Business output across the UK plummeted in April by the largest margin since records began, according to figures from the latest BDO Business Trends report.

The total drop in BDO’s Output Index for April, the first full month under the UK Government’s lockdown policy, is greater than the combined cumulative 17-month decline as a result of the 2007-08 global financial crisis.

BDO’s Output Index, which provides the most comprehensive snapshot of business output by weighting macroeconomic data from the UK’s main business surveys, fell by 35.87 points in April to 44.90. This is significantly below the lowest point the Index hit following the global financial crisis (79.28), and is the lowest level since its records began in 2005. Any reading below 95 points on the Index represents a contraction in economic output.

The data shows that lockdown measures introduced to mitigate the spread of coronavirus led to an unprecedented slump in economic activity, with the services sector most heavily impacted. Having trended downwards during the course of 2019, the Services Output Index appeared to be turning a corner at the start of the year before the crisis took hold. But April hit a record low, with BDO’s Services Output Index declining by 36.45 points to 43.88. The manufacturing sector fared marginally better, with output falling 31.30 points to 52.97.

BDO’s Optimism Index also continued to fall significantly, dropping 17.07 points in April to 73.08. This marks a record low which falls well short of the previous low point of 79.64 recorded more than a decade ago in February 2009 during the aftermath of the global financial crisis.

Despite the temporary boost to employers from policies such as the Government’s Coronavirus Job Retention Scheme, BDO’s Employment Index also slumped from 102.99 points in March to 96.18 points in April. In the clearest sign that the actual level of employment has fallen, close to 2.3 million Universal Credit declarations were made between 16 March and 28 April.

Commenting on the results, Kaley Crossthwaite, Partner at BDO LLP, said: “The speed and scale of the economic downturn generated by the coronavirus crisis is unprecedented. As the Government launches its strategy to gradually lift lockdown over the coming weeks and restart the economy, these figures show the enormity of the task it faces. Firms across all sectors have shown their ability to adapt to the evolving situation, but it will require a sustained collaborative effort from politicians and businesses in order to get the economy moving and protect jobs.”

To download BDO’s Business Trends New Economy report and find out more, visit 


Overview of the BDO indices:

An overview of all four indices is provided in the table below, detailing figures for the last three months and the same month of the previous year, to allow for comparison. 100 = average value. Above 95 = positive.

  April 2020 (Figures for this report) March 2020 February 2020 April 2019
BDO Output Index 44.9 80.77 96.64 95.74
BDO Optimism Index 73.08 90.15 101.64 73.08
BDO Inflation Index 92.13 99.41 95.59 92.13
BDO Employment Index 96.18 102.99 112.86 96.18

Note to editors

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Methodological notes

The BDO Monthly Business Trends Indices are prepared on behalf of BDO LLP by the Centre for Economics and Business Research ltd., a leading independent economics consultancy. Cebr has particular strengths in all forms of macroeconomic and market forecasting for the UK and European economies and in the use of business survey techniques.

The indices are calculated by taking a weighted average of the results of the UK’s main business surveys. It incorporates the results of the quarterly CBI Industrial Trends Survey (and the CBI Monthly Trends Enquiry which is carried out in the intervening months); the Bank of England Agents’ summary of business conditions; and the Markit/CIPS Manufacturing and Services PMI data

Taken together the surveys cover over 4,000 different respondents from companies employing approximately five million employees. The respondents cover a range of different industries and a range of different business functions. Together they make up the most representative measure of business trends available.

The surveys are weighted together by a three-stage process. First, the results of each individual survey are correlated against the relevant economic cycles for manufacturing and services. This determines the extent of the correlations between each set of survey results and the relevant timing relationships. Then the surveys are weighted together based on their scaling, on the extent of these correlations and the timing of their relationships with the relevant reference cycles.

Finally, the weighted total is scaled into an index with 100 as the mean, the average of the past two cyclical peaks as 110 and the average of the past two cyclical troughs as 90.

The results can not only be used as indicators of turning points in the economy but also, because of their method of construction, be seen as leading indicators of the rates of inflation and growth.