Business

Survey: Most NI SMEs expect to recover from impact of Covid-19 within two years

A SURVEY of smaller businesses around the north suggests most expect to recover from the impact of Covid-19 within two years.

Some 60 per cent of the 205 small and medium enterprises (SMEs) which took part in the Ulster Bank research said the pandemic had impacted their business negatively.

But 88 per cent expect to recover within 24 months.

The research, conducted by Belfast-based agency Perceptive Insight, identified a number of hurdles to recovery, including social distancing restrictions, supply chain challenges, a perceived lack of government support, and over indebtedness.

One-in-four (28 per cent) said indebtedness was a problem, with one-in-ten identifying it as quite significant or very significant.

Around one-third (38 per cent) said government assistance to ease business debt would help boost their revival.

One-in-three want more government grant support, while 31 per cent said they would like to see government invest more in infrastructure to stimulate the economy.

Less than a quarter (23 per cent) said they would like to see an extension to the furlough scheme.

Head of Ulster Bank in Northern Ireland, Mark Crimmins, said the economy lies at a crucial juncture with the ending of the furlough scheme.

"Many local firms have been dependent on this support as well as support from government-backed lending schemes," he said.

"Ulster Bank therefore wants to help stimulate further discussion about what a recovery of the economy looks like from here.

“What is clear is that government won’t be able to continue with a widespread furlough scheme indefinitely.

"It is also clear that social distancing restrictions need to remain in the current circumstances to protect employees and customers. Businesses also cannot continue to take on debt to make up for lower demand," continued the bank boss.

"Indeed, strategic solutions to corporate indebtedness may be required to help stop many firms falling into a spiral of unsustainable debt, given that corporate debt in Northern Ireland was already high before the pandemic.

“This presents a very difficult challenge for Northern Ireland and there needs to be a really honest discussion across the economy to come up with innovative answers locally to help mitigate significant business distress and job losses."