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80% of Northern Ireland firms plan to furlough some or all of their staff

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Empty streets in Belfast as people stay home amid the Coronavirus outbreak.
Photo Pacemaker Press

Empty streets in Belfast as people stay home amid the Coronavirus outbreak. Photo Pacemaker Press

Empty streets in Belfast as people stay home amid the Coronavirus outbreak. Photo Pacemaker Press

Three out of four firms in Northern Ireland have seen a significant fall in revenue since the outbreak of coronavirus, a report reveals today.

Over a third of companies have shut down temporarily and, in total, around three-quarters have three months' worth of cash or less to keep them going, the survey by the Northern Ireland Chamber of Commerce and business advisory firm BDO found.

Some 80% of firms questioned intend to furlough some or all of their staff over the next few weeks, it said.

It is the first major research into the impact of the pandemic and shutdown on firms here and was carried out between last Wednesday and Friday - just over a week into lockdown and around two weeks after Chancellor Rishi Sunak announced emergency measures including the furlough scheme to support businesses.

Ann McGregor, chief executive of the NI Chamber of Commerce, said: "The Covid-19 pandemic is a public health crisis that has huge consequences for everyone in society, and the health and wellbeing of our people is our primary concern.

"As a business representative body, this survey has highlighted that there is also a startling negative impact on business and the economy which is significant for our future when we emerge from the crisis.

"The main issue is cash flow and it is alarming to see that one in 10 businesses who responded to the survey has no reserves set aside and a further 63% have less than three months' cash reserves left.

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"For manufacturers, 'just in time' processes mean cash flow can be tight in normal times."

Cash flow problems were being made worse by trouble getting payments in, and difficulty accessing Government support, she said.

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Concern: Ann McGregor

Concern: Ann McGregor

David Cordner

Concern: Ann McGregor

Ms McGregor added: "Even where there is some activity on order books, businesses are finding that customers are becoming increasingly reluctant to pay quickly, worsening the cash flow problem.

"Firms may be able to avail of rates relief and furlough staff but they can't survive without income and in this challenging time are anxious about increasing their debt.

"They also cannot afford to wait weeks or months for reimbursement from the various support schemes to arrive."

According to the survey, only 4% of firms would have cash reserves to see them through 12 months.

One in 10 businesses has none. More than a third of respondents (36%) have closed down temporarily.

Brian Murphy, managing partner at BDO, said it was crucial that businesses received support.

"We have seen a range of vital Government interventions announced over the last two weeks, which will provide a degree of security to businesses and their employees," he said.

"There is however much work still to be done for those businesses who fall outside eligibility criteria for these schemes."

Bank of Ireland UK yesterday announced that it will fast-track payments to all its SME suppliers during the pandemic, reducing the standard terms from 30 days to within five days.

The bank said the change would remain in place until the end of June and was intended to help alleviate potential cash flow pressures for businesses, such as tech firms, who supply the bank. Yesterday an economist said he expects it will be years before the economy recovers from the effects of coronavirus.

Ulster Bank chief economist Richard Ramsey told the BBC: "The health emergency has to pass before we really talk about economic recovery, but even if there is a quick bounceback, to get back to where we were before this crisis occurred, we're looking at years, not months, given the rate of decline we have experienced and will be experiencing."


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