Prior to the coronavirus pandemic, 42% of firms across the island of Ireland said they were in growth mode, but this has now dropped to 15%, according to InterTradeIreland’s latest Business Monitor.
The cross-border trade and business development body also noted that the number of businesses across the island in decline has jumped from 7% to 53%.
InterTradeIreland surveyed 781 businesses on an all-island basis via telephone to gain a better understanding of the impact the Covid-19 crisis is having.
Both governments in Northern Ireland and the Republic have put in place unprecedented support packages for firms to address the difficulties that SMEs are facing.
Aidan Gough, Designated Officer at InterTradeIreland said: “Before Covid-19 struck, the growth in cross-border trade was helping to significantly boost productivity and profitability in both jurisdictions.
"We have a wide range of Covid-19 specific programmes and funding to help cross-border traders get back on their feet and move from crisis to recovery. There has been a lot of interest in our Emergency Business Solutions programme. Firms are offered £2,000 /€2,250 worth of support to risk assess their current business position, assist with cash flow forecasting, HR issues and to help manage suppliers.”
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23% of businesses say their staff levels have decreased, which is a figure reminiscent of the Business Monitor’s results in Q4 2009, when the island was gripped by recession.
The immediate economic shockwave caused by Covid-19 is having a similar impact in the short-term on jobs as the ’08/09 downturn on the island. In addition, the effects of the pandemic are being felt right across the globe, with no economy immune.
The Business Monitor illustrates that there is a digital divide between larger firms and micro SMEs that Covid-19 has exposed. 70% of firms with less than 10 staff say that employees have no access to emails or company files and documents. For larger firms this drops to 37%, according to InterTradeIreland’s findings.
Aidan Gough continued: “There is a recognition from policy makers that SMEs need to be digitally enabled to meet the demands of this new environment.
“InterTradeIreland’s E-merge programme can assist cross-border SMEs to develop and improve their on-line sales and e-commerce solutions to allow them to continue to compete and explore new opportunities.”
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As regards to remote working, 18% of staff in NI are working from home compared to 41% of employees in Ireland. For businesses that trade across the border, 38% of staff are working from home.
The firms surveyed recognised the need to grow their digital skills base with over one in 10 indicating they needed to enhance their abilities in this area.
For the first time, risk-assessment skills were also identified as in-demand, with 22% of companies indicating they need to increase talent in this area.
InterTradeIreland’s Business Monitor also highlight the resilience of firms, with 73% reporting they are planning to re-hire staff.
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In terms of the biggest barriers to recovery, SMEs citied maintaining social distance with customers (41%) and the ability to provide service in a way that is profitable because of social distancing (34%).
This was most marked in the leisure hotel and catering sector (69%) but it is an issue for just under a third of professional service firms (31%).
Brexit also remains a huge challenge, with the number of businesses that have made plans standing at only 14% and 30% for cross-border traders.
Of those companies that have made preparations, over a third (37%) say they will now need to revise their plans in light of Covid-19.
Aidan Gough concluded: “If there is anything that Covid-19 has shown us, it’s the importance of assessing risk and responding properly. We know that businesses have remarkable resilience, but it’s important not to be complacent around Brexit.
“InterTradeIreland has a number of supports and resources in place to help SMEs mitigate risk and adapt to thrive in a post-Brexit world.”
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Find more info on InterTradeIreland's Covid-19 support programmes for businesses here.
