Results from the latest Northern Ireland Chamber of Commerce and Industry Coronavirus survey confirm the extent of the impact COVID-19 has had on business to date.
Among the findings from the Chamber Coronavirus survey of local businesses, which took place between 25-29 January 2021, are:
- More than half (54%) have seen UK sales contract in the last 3 months, while 53% have seen export sales decline
- One third of business (34%) have less than six months before they run out of cash
- 40% say they would make staff redundant if schemes ended in March / April
The business support organisation is calling on the UK Government and the NI Executive to extend the furlough scheme until at least July 2021, whilst publishing both a plan for the return to work and an overall economic recovery strategy.
Business performance worsens
According to the survey, more businesses continue to see domestic and export sales fall than those experiencing any increase. More than twice as many have seen UK sales contract (54%) over the last three months compared to those seeing an increase (20%). The gap is wider for exports, with 53% seeing a contraction in sales compared to 18% seeing any increase.
Critical cash flow forecasts
While around 2 in 5 have a relatively healthy financial position, a third of respondents have less than 6 months left before their business runs out of cash. Around 50% are working at between 80% to 100% capacity but 1 in 10 are running at less than 20% capacity.
Rating the support from government
When asked to rate the effectiveness of the various government schemes to support their business throughout the crisis, the Coronavirus Job Retention Scheme (CJRS), allowing firms to furlough staff, had by far the highest effectiveness rating. 53% believe it has been very effective in supporting the business and 23% somewhat effective.
VAT deferral has also been a positive support to businesses (50%) followed by COVID loans (39%). The Self-Employment Income Support Scheme was rated as the least well regarded mechanism.
What firms may do if support expires in March and April
When asked what their business might do if the government support schemes end according to published timetables in March and April, 40% of Northern Ireland businesses said they would make staff redundant, while 30% would reduce staff hours. In addition, 23% would reduce operations and 20% would reduce and/or cancel investment plans.
Responding to the Chamber Coronavirus survey findings, Ann McGregor, Chief Executive, NI Chamber said: “While business have been very supportive of the need to prioritise public health during the pandemic, they have paid a heavy price for 11 months of restrictions.
“Firms are desperate to start trading again so they can boost revenue and start thinking about the future. To do so they need to see a clear, evidence-based plan for reopening safely.
“Until the economy can open fully, an appropriate level of business support must remain in place. A decision from the UK Government about the extension of the furlough scheme is required urgently – to end it prematurely in April could have enormously damaging consequences in terms of redundancies, reduced staff hours and cutting back on operations.
“In tandem, businesses, employees and investors need sight of a robust overall economic recovery strategy. One that is pragmatic and practical, but which also grasps the opportunities which we have unique window of opportunity to capitalise on. The Chamber has already presented Ministers with our proposals around skilling up for the future of work, sustainability and infrastructure and we are resolutely committed to seeing those through.”