More than one in 10 Irish SMEs have ceased trading temporarily or permanently as a result of Covid-19, a Central Bank report has found.
The SME Market Report 2020 highlights the challenges faced by firms during the coronavirus pandemic.
The survey found that 24% of businesses had ceased trading temporarily or permanently in April but this fell to 11% by May 31 as lockdown restrictions eased.
Firms in the accommodation and food sector recorded the biggest decline in turnover.
Covid-19 has posed unique challenges to SMEs’ operating environment, the report notes.
It states that the primary economic impact from the pandemic has been the high level of uncertainty and the closure of many firms.
It said companies have adjusted to lower turnover through workforce measures such as decreased hours or temporary layoffs.
Government support for firms and employees includes the Temporary Wage Subsidy Scheme (TWSS) and Pandemic Unemployment Payment (PUP).
The report also notes the heavy impact on firms’ turnover, with 21% of businesses reporting that turnover is down by 75%, although this differs by sector.
Around 39% of companies have unpaid invoices due to business lost during the pandemic, amounting to around 20% of 2019 revenue for the typical firm.
As many as 42% of firms report changing or deferring payments to manage cash flow, increasing to 91% of businesses in the accommodation and food sector.