Quarter of firms fear new virus wave could sink them

CEOs cite packed public transport and offices as workers' key worries

Confidence: Institute of Directors CEO Maura Quinn

Shawn Pogatchnik Twitter Email

July 15 2020 02:30 AM

A QUARTER of Irish businesses aren't confident they could survive a second wave of Covid-19 lockdowns.

A survey of 306 company CEOs and directors found that 5pc think their business would collapse during any repeat of widespread closures, while 20pc more weren't confident their firm would survive.

The Institute of Directors in Ireland said the threat of a second pike in infections is by far the biggest worry cited by company chiefs in its sentiment survey conducted in the first week of July. Some 34pc rated a second wave of Covid-19 as their top risk - versus just 7pc for Brexit effects on trade.

They identified "the biggest barrier" to getting staff back into the workplace as workers' fear of infection (24pc), poor alternatives to crowded public transportation (22pc), and inadequate office space to maintain two metres' distance from colleagues (21pc).

When asked to identify the biggest likely legacy from the crisis, three-fifths said increased long-term working from home, a third the widespread collapse of firms.

"The challenges presented by Covid-19 in business terms are complex. The threat of a second wave of the coronavirus is very real and the implications of that are unknown and rooted in uncertainty," said Maura Quinn, chief executive of the Institute of Directors.

"Business leaders currently see the pandemic as the most significant risk factor to their organisations. They also see it as the biggest barrier to their workforces returning to the company workplace, notably due to public transport options and the ability to implement safe social distancing measures."

A separate sentiment survey by market analytics firm IHS Market for AIB also found business optimism on the wane, even as more sectors reopen to trade.

Its survey of 650 manufacturing and services firms found that most still think their trade will be stronger 12 months from now. But the margin between those foreseeing gains versus losses has narrowed to its third-lowest level since AIB began compiling the sentiment index in 2009.

AIB's head of business banking, Hilary Gormley, said the results reflected the "extremely wide-reaching nature and severity" of Covid-19 disruption to some sectors, but not others.

"The same can be said for the recovery, as the survey highlights that the speed of recovery for businesses will vary depending on their activities, markets and customers," Ms Gormley said. "But the key focus for businesses in the short term is liquidity, and ensuring they are adequately resourced and are focused on managing their working capital as best they can."

The survey identified rising expectations of cuts to capital spending, including R&D (research and development).

A majority of services companies now expect to cut such investment in the coming 12 months, while most manufacturing firms still intend to grow investment - but at net levels last recorded in 2012.