Support for Ireland’s beleaguered SMEs will be required long after the COVID-19 pandemic as the impact of the pandemic will be felt for many years to come, according to an Economic Report published by CPA Ireland today.
CPA Ireland, one of the country’s largest accountancy bodies whose members advise over 100,000 SMEs, has urged the government to give early reassurances that support will be maintained into the medium term.
In a survey of CPA members working in practice and industry carried out for the report just 6% of respondents are optimistic that the National Economic Plan has the capacity to improve conditions for SMEs. This failure will have far reaching consequences for the economy and for society if adequate supports are not in place to support the SME base which is the bedrock of the economy. A massive 97% of respondents believe that further initiatives will be required from government to sustain businesses in the long term.
SME’s account for over two thirds of Ireland’s business employment (67.5%) totalling over 1 million people and the survey of CPA members found that 74% will have had stagnant or declining business conditions in 2020.
The report’s author, economist Jim Power, said “It is clear that COVID-19 has had a profound impact on the vast majority of SMEs. COVID has altered the whole environment in a dramatic fashion and while our collective optimism about a vaccine is growing, the bottom line is that many SMEs are now under considerable pressure and will need as much assistance as possible for as long as possible”.
“There are many long-term and strategic challenges facing SMEs post COVID including adapting to an increasingly virtual trading environment, sustainability planning, a continued shift towards remote working and an overall weaker economic demand.
“Brexit continues to cause concern amongst SMEs. Even at this late stage one third (33%) of CPA accountants state their clients are not adequately prepared for its impact. The key concerns of those surveyed include Tariffs: 56%; the impact on Supply Chain: 52%; Restrictions on movement of people: 24%; Currency volatility: 36% and Legal Issues: 16%
“The perfect storm of Brexit and the Pandemic demands a response from policy makers like we have never seen before and yet 75% of CPA Members in Practice and 44% of CPA Members working in industry do not believe adequate Brexit supports have been put in place by government”.
President of CPA Ireland, John Devaney said “The impact of COVID-19 has been dramatic on economies across the globe, setting immense challenges for policy makers and for businesses alike.
“Now is the time for our government to plan for how they will support rebuilding and renewing our vital SMEs. Government policy must become more focused on creating an SME sector that is dynamic and innovative. It should broadening the enterprise and export base to ensure that the economy is resilient, diversified and adaptable. Finally, it must create opportunities and incentives for SMEs to improve management quality and training to foster innovation.”
The impact of this pandemic is very much unequal, and many have suffered at both a personal and at a business level. And yet, our research points to great resilience and optimism that things will get better even in the face of this unprecedented uncertainty.
A copy of the report can be found here