Irish CFOs are more worried than their global peers about the impact of Covid-19 but are urged to plan for the recovery now.
Perhaps emphasising Ireland’s position as a small, open economy, 96pc of Irish CFOs are concerned about the impact of Covid-19 on business operations.
This compares with 73pc of other global CFOs, according to a survey by PwC.
“Before this pandemic hit, many businesses were focused on long-term growth. Now companies are being forced to protect their bottom line”
As a response to the crisis, Irish business leaders are taking clear action to cut costs, with cost containment (78pc) and deferral or cancellation of planned investments (61pc) high on the agenda.
More layoffs cannot be ruled out (26pc) and over a third of businesses (35pc) still plan on availing of the Government supports.
These are some of the key results in this PwC CFO Pulse survey conducted last week. This survey, which is a fortnightly poll of 824 global financial leaders including Ireland, helps to identify the business and economic impact of Covid-19.
What is keeping Irish CFOs awake at night?
In line with global counterparts, the top concern with respect to COVID-19 for Irish CFOs is the financial impacts on their organisation’s operations, liquidity and capital resources (70pc). Two-thirds (65pc) are concerned about the possibility of a global recession, though these fears are less amongst international peers.
Surprisingly, just 4pc of Irish respondents are concerned about cybersecurity risks, in spite of increasing threats of cyber attacks during this time.
The survey reveals that six out of 10 (61pc) Irish respondents expect productivity losses due to lack of remote working capabilities in the month ahead, significantly more than international peers (45pc).
Almost four out of 10 (39pc) expect temporary furloughs (or leave of absence) due to reduced demand (Global: 38pc). A quarter (26pc) expect layoffs (Global: 28pc) which is likely to increase the already high number of layoffs here with unemployment levels already having jumped to a record 16.5pc at the end of March.
The survey confirms that business leaders are taking action. In line with global CFOs, three quarters (78pc) of Irish respondents are considering the implementation of cost containment measures. Six out of 10 (61pc) are considering deferring or cancelling planned investments (Global: 65pc).
“Similar to what’s being seen globally, Irish companies are cutting costs and putting planned investments in technology, workforce and capital expenditures on hold while they try to weather an unprecedented economic storm,” said Garrett Cronin, consulting partner at PwC Ireland.
“Before this pandemic hit, many businesses were focused on long-term growth. Now companies are being forced to protect their bottom line. However, businesses are also looking to the long term, including, with the help of Government supports, protecting the livelihoods of their people for as long as is possible.”
Make plans for the recovery now
Over a third (35pc) of Irish respondents are currently planning to or considering to take advantage of Government supports to address the fall-out of ovid-19 and is significantly less than global counterparts (45pc).
“It is vitally important that companies prepare plans for their recovery, no matter how difficult this might be”
This is despite the already significant take-up in Ireland of employment supports, for example, the Department of Employment Affairs and Social Protection recently announced that by mid-March it had already processed 625,000 applications for the Covid-19 Pandemic Unemployment Payment or a jobseeker’s payment.
However, a further 30pc of Irish respondents indicated that it was difficult to assess right now as to whether or not they would take advantage of the support. 35pc said that they would not be taking advantage of the supports on offer.
Over four out of10 (44pc) Irish CFOs believe that if the pandemic were to end today, their business would return to normal within three months and compares to 56pc globally.
At the same time, almost a fifth 17pc of Irish respondents stated that they would not expect recovery for over a year (Global: 6pc).
“It is vitally important that companies prepare plans for their recovery, no matter how difficult this might be, assessing outcomes under a number of different scenarios,” said David McGee, Markets & Strategy Partner, PwC Ireland.
“I also encourage Government, who have already indicated this is on the agenda, to give priority to a broad based approach to further working capital measures to be made available to support businesses through this crisis and for the recovery.”
Written by John Kennedy (email@example.com)
Published: 17 April, 2020