Irish finance leaders much more concerned about the impact of COVID-19 on their businesses than global peers

An almost unanimous 96% of Irish CFOs reported that the potential impact of COVID-19 is causing great concern regarding a significant impact on business operations, significantly higher than other global CFOs (73%).  As a response, Irish business leaders are taking clear action to cut costs, with cost containment (78%) and deferral or cancellation of planned investments (61%) high on the agenda. More layoffs cannot be ruled out (26%) and over a third of businesses (35%) 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.  

Major concerns regarding global recession, yet underestimating concerns about cybersecurity

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 (70%). Two-thirds (65%) are concerned about the possibility of a global recession, though these fears are less amongst international peers.  Surprisingly, just 4% of Irish respondents are concerned about cybersecurity risks, in spite of increasing threats of cyber attacks during this time.

Productivity losses due to lack of remote working capabilities more severe than global

The survey reveals that six out of ten (61%) Irish respondents expect productivity losses due to lack of remote working capabilities in the month ahead, significantly more than international peers (45%). Almost four out of ten (39%) expect temporary furloughs (or leave of absence) due to reduced demand (Global: 38%). A quarter (26%) expect layoffs (Global: 28%) which is likely to increase the already high number of layoffs here with unemployment levels already having jumped to a record 16.5% at the end of March.

Taking action: Cost containment is the highest priority for finance leaders

The survey confirms that business leaders are taking action.  In line with global CFOs, three quarters (78%) of Irish respondents are considering the implementation of cost containment measures. Six out of ten (61%) are considering deferring or cancelling planned investments (Global: 65%).

Garrett Cronin, Consulting Partner, PwC Ireland, said: “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.  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.”

More take-up of Government COVID-19 supports expected

Over a third (35%) of Irish respondents are currently planning to or considering to take advantage of Government supports to address the fall-out of COVID-19 and is significantly less than global counterparts (45%).  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 30% of Irish respondents indicated that it was difficult to assess right now as to whether or not they would take advantage of the support.  35% said that they would not be taking advantage of the supports on offer.

Optimism prevails

Over four out of ten (44%) Irish CFOs believe that if the pandemic were to end today, their business would return to normal within three months and compares to 56% globally.  At the same time, almost a fifth 17% of Irish respondents stated that they would not expect recovery for over a year (Global: 6%).

David McGee, Markets & Strategy Partner, PwC Ireland, concluded: “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.  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.”