New contracts won by Enterprise Ireland-backed companies declined by 12% in the first half of 2020 due to Covid-19 with this year described as "very challenging" for Irish exporters.
The state agency responsible for helping Irish companies export to international markets said Covid-19 has had a negative impact on order books and international market confidence. Approximately 1,000 client companies are impacted by the pandemic with 75% reporting that their exports have been impacted by Covid-19 and more than half saw a negative impact on cash flow. 300 companies are very exposed with high levels of exports to the UK.
The agency has warned that challenging conditions will continue to impact exporters who will face the dual challenge of both dealing with the Covid-19 impact on their business and also the impending January 1st Brexit deadline.
For 2019, Enterprise Ireland reported strong levels of export performance by its client companies, up 8% to €25.6bn. Last year, exports to the Eurozone region saw record growth of 15% to €5.6bn, while exports to North America increased by 16% to €4.7bn last year.
Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, TD, said: “Before the onset of the Covid-19 pandemic, Enterprise Ireland backed companies had already faced challenging circumstances due to the uncertainty caused by Brexit. Despite this, Irish exporters had a really strong year in 2019, with record levels of growth.
“We have already put in place a range of measures to help businesses get through the unprecedented difficulties caused by Covid-19, including grants, low-cost loans and deferred tax liabilities. We know we need to do more as our economy continues to reopen. The July Jobs Stimulus will be far-reaching and of scale to get our people back to work and get us back on the road to growth and prosperity.”
Julie Sinnamon, CEO of Enterprise Ireland said that since the outbreak of the Covid-19 pandemic they have seen many Irish businesses pivot in response to emerging market needs in areas such as contact tracing, traveller safety and confidence in airports and hygiene transparency in the hospitality sector.
“The second half of 2020, however, is expected to be one of the most challenging facing Irish businesses in recent history. Not only have many businesses been impacted by a significant reduction in customer demand from markets across the world due to Covid-19, but they are also facing the largest structural change to trading with the UK in over 50 years."