IMPACT OF COVID-19 ON BUSINESSES IS DEEP AND LONG LASTING WARN LOCAL CHAMBER OF COMMERCE CHIEFS
Updated: May 28, 2020
Four local chambers of commerce have warned that the effects of the COVID-19 pandemic on business across Northern Ireland is deep and will be long lasting. The Chief Executives of Belfast Chamber, Causeway Chamber, Derry Chamber and Newry Chamber issued their warning after conducting a survey across their members.
The survey of nearly 250 businesses across the full range of sectors in the local economy found that:
Jobs – 39% of businesses believe that when the Coronavirus Job Retention Scheme ends in June, that without ongoing employment support their employment requirements will be more than ¼ lower than pre-COVID-19 levels;
Turnover – Nearly 60% of businesses say that their turnover will more than halve over the next 3 monthswith over a third fearing a more than 50% fall in sales over the year;
Cash – More than 2/3 of businesses (68%) have less than 3 months cash reserves with 15% operating with under one months’;
Businesses Closed – 49% of businesses are closed and not trading at all with 92% of hospitality, leisure and tourism businesses and 60% of retailers in that position;
Insurance – No businesses surveyed have successfully claimed for disruption to their business under their insurance policies;
Supply Chains – Just over half (51%) of businesses have experienced significant or moderate disruption to their supply chains;
Rent – Almost a third of businesses (28%) have sought and received a reduction or flexibility in the payment of their rent, whist 17% have asked and been refused;
Banks – 38% of businesses have gone to their bank/lender to seek help to get them through the COVID-19 crisis with only a quarter applying for either the Government backed CBILS or Bounce Back Loans. Of those who have applied, 11% have received their loan payment, 31% are still being processed and 58% are still in discussions; and
Reopening – 62% of businesses have a plan in place to allow them to safely reopen with 58% saying that it would take them more than 1 week to reopen again.
Commenting on the survey results, Belfast Chamber Chief Executive Simon Hamilton, Causeway Chamber Chief Executive Karen Yates, Derry Chamber Chief Executive Paul Clancy and Newry Chamber Chief Executive Colm Shannon said, “We have known for some time that the health emergency caused by COVID-19 is having a hugely damaging impact on the health of our economy, but these survey results illustrate how stark and indeed long lasting that effect is going to be.
Businesses are reporting a scarcely believable drop in their turnover with over half the businesses worried that their sales will be down by more than 50% in the next 3 months. Over 2/3 of business have less than 3 months cash reserves with many of those businesses in receipt of absolutely no income whilst overheads continue. Half of all businesses surveyed have experienced significant or moderate disruption to their supply chains and that will take time to repair. Whatever way we look at it, the situation is grim for a great many businesses.
Whilst we all want to see our economy reopen when it is safe to do so, what is abundantly clear from these survey results is that so profound will be the damage done to our economy by COVID019 that many businesses in those sectors hardest hit will need ongoing support and assistance from Government. For example, the Coronavirus Job Retention Scheme is due to close at the end of June. With business not likely to return to normal for many companies within that timescale and a significant number likely to still be shut as a result of ongoing Government restrictions, it is easy to see why 39% of respondents to our survey say that their employment requirements could be more than 25% lower than pre-coronavirus levels if some for of employment support does not continue. This evidence makes a strong case for the Government to examine extending the furloughing scheme in some form beyond June so that jobs and livelihoods can be protected.
It is encouraging that in the case of 62% of businesses surveyed that they have a plan in place to reopen safely. As well as offering advice to the other near 40% of businesses who don’t, the fact too that over half of businesses will take more than a week to reopen and 15% will require over 2 weeks, illustrates the need for Government to produce a roadmap for reopening the economy that allows businesses to plan and prepare properly.
This survey is yet further evidence of the existential challenge that COVID-19 is presenting for many businesses and sectors of our economy. Government and Executive support is far has proven hugely helpful for those businesses who have received it. The outlook that this survey gives suggests that ongoing help is going to be needed for many of our industries”.