Part 2 – CSO: Business Impact of Covid19 Survey
Recently we brought you the first series of the CSO Report from July on the Business Impact of Covid-19. We now bring you the remaining section of the report with analysis and comments.
Q1. Business costs exceeded turnover for 20.4% of responding enterprises
- One-fifth (20.4%) of responding enterprises indicated that business costs had exceeded turnover since the beginning of lockdown from 16 March to 26 July.
- More than a quarter (25.7%) of large enterprises reported that costs had exceeded turnover during this period.
- Small enterprises at 17.0%, accounted for the lowest proportion of enterprises where business costs had exceeded turnover.
Comment: Without trying to state the obvious, it is simply not sustainable for a business sot continue operating with costs exceeding turnover – How soon will we see the big hit with busines shutting their doors permanently? It is the stark reality we are facing unless something is done.
Q2. Over half of enterprises took no measures to manage cashflow because of COVID-19
- More than half of responding enterprises (57.6%) took no measures to manage cashflow because of COVID-19 during the four weeks from 29 June to 26 July 2020.
- Almost a quarter (23.5%) of responding enterprises deferred or changed revenue payments to manage cashflow during the same four-week period.
- Over one-fifth (22.3%) of respondents deferred or changed property payments, while 19.1% deferred or changed payments to suppliers to alleviate cashflow issues because of COVID-19.
Comment: From a business point of view it is essential that measures are at least reviewed or taken in relation to managing cashflow on a weekly basis. As a business owner it is one of the key elements to consistently keep under review.
Q3. Almost two-thirds of responding enterprises concerned about another lockdown
- An increase in COVID-19 cases leading to another lockdown was among the top two concerns for 64.1% of enterprises responding to the survey.
- Almost half (46.8%) of enterprises were concerned that the COVID-19 pandemic has reduced demand due to lower consumer confidence.
- Almost three in ten (29.8%) respondents reported maintaining cashflow was among their top two concerns.
- Increased costs of business was a top two concern for 29.5% of enterprises.
- Reduced workforce productivity was a concern for 13.5% of respondents.
- The reduced availability of Government supports was one of the top two concerns for 13.3% of enterprises.
- One in ten (10.3%) enterprises had no immediate concerns.
Comment: The concerns facing Business owners was quite broad, however another lockdown was very high on their list for the simple reason that a large percentage of businesses won’t survive another lockdown – put simply can the Economy as a whole survive another lockdown?
Q4. Almost three in five enterprises expressed confidence in having the financial resources to continue operating for longer than six months
- Almost three in five (59.5%) responding enterprises expressed confidence in having the financial resources to continue operating for longer than six months.
- Nine in ten (90.0%) enterprises were confident in having the financial resources to continue operating for more than another month.
- However, 4.4% see their business continuing financially for less than a month. Of responding enterprises, 2.6% expressed confidence in having the financial resources to continue operating for less than one month, while 1.8% of respondents were not confident in having the financial resources to continue operating. See Figure 15 and Table 13.
Comment: Six months is not a long time in Business terms and if almost 60% of the businesses surveyed have concerns over having financial resources to operate past this, then 2021 for the Irish economy is concerning. The massive impact of this pandemic on SME’s in Ireland will truly be felt in Quarter 1 of 2021.