A survey conducted by four local chambers of commerce has revealed a bleak picture of the state of the economy across Northern Ireland as a result of the COVID-19 pandemic.
The survey of 250 business from a wide range of sectors including manufacturing, retail, hospitality and tourism, professional and legal services, business administration and support, technology and charities/social enterprises was carried out by Belfast Chamber, Causeway Chamber, Londonderry Chamber of Commerce and Newry Chamber of Commerce and Trade between 8 April and 11 April.
Headline results from the survey include:
· only 12% of businesses remain physically open with 43% of businesses closed and not trading at all and slightly over 1/3 of businesses have their staff working from home;
· 80% of businesses planning to use the Government’s Job Retention Scheme with nearly 6 out of 10 employees (58% in those businesses being furloughed;
· the sectors furloughing most workers are retail, charities/social enterprises, hospitality and tourism, and business administration and support;
· less than half of businesses eligible for the Executive’s Grant Schemes with only 47% of those eligible for the £10,000 grant having received their payment; and
· fewer than 1 in 5 businesses (16%) have applied for a Government backed Coronavirus Business Interruption Loan.
Commenting on the survey results, Belfast Chamber Chief Executive Simon Hamilton said, “We are all well aware that COVID-19 is having a profound effect on our health service but it is also abundantly clear from this survey that the pandemic is also doing huge damage to the health of our economy. Almost half of the businesses survey are closed and are no longer trading. that is hundreds of businesses employing thousands of people with no income, rising debts and overheads and growing concerns about the future. It is little wonder that 80% of businesses have said that they are likely to use the Government’s Job Retention Scheme. What is startling is the sheer volume of employees that they intend to furlough. Amongst those firms intending to use the scheme, some 58% of their employees will be placed in furlough. That equates to over 5,000 employees across the businesses responding to the four Chambers’ survey. We know that it isn’t business as usual during this emergency but what we are seeing is a virtual economic shutdown which can only create real worries about how our economy recovers”.
Karen Yates, Chief Executive of Causeway Chamber added, “One of the earliest announcements by the Chancellor of support for business to deal with the effect COVID-19 was having on the economy was the Coronavirus Business Interruption Loan Scheme. However, uptake amongst the businesses we surveyed is low with fewer than 1 in 5 businesses applying for a Government backed loan. Of those who have, the feedback from businesses is a “mixed bag”. Some are having as positive experience while others are finding the process slow and difficult to navigate. Many businesses also have a negative perception of the process which is putting them off from applying at all. Others do not wish to take on more debt of any kind and there has been disappointment expressed at the interest rates offered by banks to extend existing facilities. We hope that recent changes to the structure of the scheme can filter through and help companies get the help they need to survive”.
Derry Chamber Chief Executive Paul Clancy continued, “Whilst our members are very grateful for the support from Government and the Executive that they have received so far, many of the respondents to our survey have expressed frustration at the gaps in some of those support schemes and the slowness many are experiencing in getting the help they are entitled to. When asked what the biggest challenge COVID-19 presented for their business, the overwhelming majority of respondents indicated that it was cashflow. As a result of Government enforced restrictions and closures, many of our members have seen their business’s income disappear almost overnight. These businesses need help urgently and we have found that whether it is the Executive’s grant schemes or the HMRC’s Job Retention Scheme, detail and delivery has simply been too slow. This needs to change, or many good businesses will not exist after this crisis”.
Newry Chamber Chief Executive Colm Shannon concluded, “Our survey also found that many businesses have a real fear for the future, not just of their own firms but also the wider economy. Several respondents stated a desire to see the Government spell out when the lockdown might be lifted to allow businesses to better plan and for the economy to restart. Business also wants to see the Government develop a stimulus plan to attempt to prevent a likely recession from spiralling into a much deeper, longer term economic crisis with the Executive locally, working closely with the likes of Invest NI, local Councils, enterprise agencies and bodies such as InterTradeIreland to help aid recovery. This is an immense challenge for our economy both now and in the time ahead. Just as business needs Government help to get through this in the short term, our economy will require serious help from the Government and the Executive to help us rebuild”.