PwC: 96pc of Irish CFOs ‘greatly concerned’ about impact of Covid-19

17 Apr 2020

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A new PwC survey suggests Irish CFOs are pessimistic about the potential financial and economic repercussions of the Covid-19 crisis.

PwC has published the results of its latest survey of Irish and global finance leaders, which aims to identify the business and economic impacts that Covid-19 has had on their operations.

The fortnightly survey polled 824 global financial leaders last week, with respondents from Ireland, Germany, France, Denmark, Brazil, Colombia, Japan, Portugal and more.

According to the survey, 96pc of Irish CFOs reported that the potential impact of Covid-19 is causing great concern for them and they expect a significant impact on business operations.

The level of concern shown by Irish finance chiefs is higher than those in other regions, with only 73pc of CFOs globally reporting that they are greatly concerned.

The findings

Just over four out of 10 Irish CFOs surveyed believe that if the pandemic were to end today, their businesses would return to normal within three months, which compares to 56pc globally. Just under a fifth (17pc) of Irish respondents said they would not expect a recovery for over a year.

Global recession is a concern for 65pc of the respondents from Ireland, which is higher than their international peers. Only 4pc of Irish CFOs expressed concern about cyberattacks during this period, despite the fact that there is an increased threat at the moment, according to PwC.

‘Before this pandemic hit, many businesses were focusing on long-term growth. Now companies are being forced to protect their bottom line’

Additionally, 61pc of Irish respondents expect productivity losses in situations where remote working is not possible or suitable. Only 45pc of CFOs globally expressed similar concerns.

David McGee, markets and strategy partner at PwC Ireland, said: “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 the Government, who have already indicated this 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.”

Taking action

According to the PwC survey, 78pc of Irish business leaders are turning to cost containment and 61pc are deferring or cancelling planned investments to cut costs in light of the crisis. In addition, 39pc of businesses said they expect temporary furloughs in the coming weeks.

More than a quarter (26pc) said that “more layoffs cannot be ruled out” and 35pc still plan on availing of the new Government employment supports, despite a significant uptake in Ireland already.

The Department of Employment Affairs and Social Protection said that it has processed 625,000 applications for the Covid-19 Pandemic Unemployment Payment or a jobseeker’s payments.

Just 35pc of Irish CFOs surveyed said their company would not be taking advantage of the supports on offer, while 30pc said that it was “difficult to assess” whether or not they would need to apply for support.

Garrett Cronin, consulting partner at 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 focusing 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.”

Kelly Earley was a journalist with Silicon Republic