With the ongoing transition from Brexit in the midst of the ever looming issue that is the global pandemic, it is no surprise that InterTradeIreland’s latest business monitor (Q4 2020) highlights that many businesses are struggling. Half of firms report that they are now contracting, winding down or surviving at all costs, compared to just 13 percent at the same point last year.
When asked to consider the extent to which business operations are being impacted by both Covid-19 and Brexit, businesses are more likely to cite Covid-19 alone as the main source of impact (61 percent), with just 5 percent of companies saying Brexit alone has caused an impact on their operations. Almost 1 in 3 firms however say that both developments are playing a role in their current business concerns.
InterTradeIreland’s Assistant Director of Strategy and Policy, Kerry Curran says, “Businesses are currently in the unenviable position of facing the dual tests of the pandemic and the end of the Brexit transition period. While no sector is immune from the ongoing challenges, the data reveals that cross border traders and exporters are beginning to see sales losses moving in the right direction.”
The survey reveals that 58% of businesses continue to struggle with reduction in demand for goods and services, low business and consumer confidence and the subsequent impact on their cash flow. The manufacturing and leisure sectors have been particularly impacted by the current challenges, with the pandemic being the primary source of concern for those in industries impacted by lockdowns and social distancing restrictions.
The business monitor also shows the reliance that firms have on imports and exports from GB, the island of Ireland and the rest of the EU. 36% import and 25% export within the island and the EU, with 31% of firms across the island importing from, and 13% exporting to, GB. Kerry adds “Supply chains have become very integrated in recent years and we recognise that for many firms the disruption to supply chains has created uncertainty and additional demands on time and resources. InterTradeIreland has specific Covid-19 and Brexit support Programmes, as well as online resources, to help businesses as they respond to the pandemic and begin to navigate the new trading relationship.”
Looking ahead, 76 percent of businesses believe Covid-19 will continue to have a negative impact on their operations over the next 12 months. Less than half believe Brexit will have a negative impact, with 43 percent citing Brexit as having no impact whatsoever.
Curran says “While the data does make for stark reading, and businesses are understandably focused on directing resources to survive these once in a lifetime challenges, I would encourage firms to make best use of available supports.”
These are extremely challenging times, although with InterTradeIrelands' expert support and advice businesses can effectively develop a tailored strategy to get them back on track.