Half of Irish small and medium-sized businesses expect revenue to decline by at least 60 per cent over the next three months, according to a major new survey.
More than six out of 10 companies have already sought a deferral on payments, generally to landlords, banks or the Revenue Commissioners, highlighting the cash squeeze which has hit many businesses. Meanwhile one in five companies have laid off all their staff.
The survey, by Chambers Ireland, the umbrella body for the chambers of commerce movement , was conducted last weekend and received a response from 1,149 companies. The vast bulk were SMEs and many micro businesses – typically with one or two employees – were included, with smaller businesses generally suffering the greatest distress.
Some 47 per cent of the companies surveyed have laid off staff and, in half of the cases were this had happened, more than 30 per cent of staff had been involved.
Close to half of the companies have availed of the Government wage subsidy scheme.Some of those who did not said that they had not because of legal and accountancy advice, which the Government has tried to counter in promoting the scheme.
More than four out of 10 of the companies surveyed had shut their doors and expect to remain closed for around 12 weeks. A further 30 per cent had closed their public offices and were operating from home. Some 20 per cent have laid off all their staff.
The survey comes after an unprecedented month for Irish businesses, with many sectors closed due to Government restrictions and others operating well below full capacity.
Chambers Ireland chief executive Ian Talbot said the resulting cash shortage across the business sector has meant a " mini ice-age" for Ireland's SME sector as demand collapses.
The Government has announced a range of supports through the wage subsidy scheme, the possibility of deferring tax payments and rates for a period and agreement with banks to provide leeway on loan repayments.
Liquidity grants
Some liquidity supports are also being provided,with Minister for Business, Heather Humphreys yesterday announcing a new package, including the expansion of the existing loans schemes available from the Strategic Business Corporation of Ireland (SBCI).
The Government now says that €1 billion of liquidity supports are available, but businesses are likely to continue to press for a higher level of support to help companies through the crisis.
The Chambers Ireland survey shows that businesses believe that more needs to be done. Almost all the companies surveyed believe the economy will need a major stimulus once the worst of the crisis is over.
Some 95 per cent call for the availability of liquidity grants to help support businesses through the cash squeeze while 96 per cent believe that the temporary measures announced already, such as the wage subsidy, will need to be extended past the original 12 week plan.
More than three out of every four of the companies said the two-month deferral on rate payments which the Government has brokered with local authorities was not sufficient, with a deferral of at least six months called for and some calling for a grace period of a full year.
