Firms reeling from Covid and Brexit 

Half of companies surveyed by all-island trade group said they are either contracting, winding down, or surviving “at all costs” compared to just 13% last year

Brexit and Covid challenges continue to haunt businesses.

Businesses are severely struggling due to the twin challenges of extended Covid lockdown restrictions and supply-chain havoc caused by Brexit, two separate surveys show.

Of all the companies questioned in a survey by all-island trade group InterTrade Ireland, half said they are either contracting, winding down, or surviving “at all costs” compared to just 13% last year.

While most said they are more heavily impacted by the pandemic, a third said both Covid and the Brexit fallout feature in their current concerns.

Nearly 80% of the companies — a third of which have significant trade links with the UK — said they see Covid continuing to negatively impact their business for the next 12 months.

"The manufacturing and leisure sectors have been particularly impacted by the current challenges,” said InterTrade Ireland’s assistant director of strategy and policy Kerry Curran.

Indeed, the performance of Ireland’s manufacturing sector continues to weaken, with extended Covid restrictions on business and supply-chain disruption brought about by Britain’s exit from the EU causing havoc.

The latest edition of AIB’s monthly survey of manufacturers shows the overall sector still to be in growth mode. However, that masks a continued contraction in the key areas of new business orders and actual manufacturing output levels.

"Tight Covid lockdown restrictions, both here and elsewhere, are creating a challenging backdrop for businesses, with firms reporting weak demand and thus falling new orders in Ireland and from the UK,” said AIB chief economist Oliver Mangan.

"Supply chains remained under severe pressure, with Brexit widely cited as the main cause of major delays, leading to a further marked lengthening in delivery times,” said Mr Mangan. "Rising administration and transport costs as a result of Brexit, as well as upward pressure on prices of raw materials, are generating increased inflationary pressures."

However, the rate of growth contraction eased in February, compared to January, and employment levels rose. Manufacturing firms said they remained confident in a revival in business demand later this year.