COVID-19 heralds “dramatic reversal in business confidence” - IoD survey
“This is a challenge unlike any other for Ireland and its business leaders,” says IoD Ireland Chief Executive
Over 81% of business leaders now regard COVID-19 as the biggest risk facing their organisations, and 96% of directors are ‘more pessimistic’ in respect of the Irish economy in Q1 2020 in comparison to just 24% in Q4 2019.
These are just some of the stark findings of the latest quarterly Director Sentiment Monitor, for Q1 2020, conducted by the Institute of Directors (IoD) in Ireland between 18th - 26th March 2020 and which highlight the challenges faced by Ireland, its business leaders, their organisations and the wider economy by the COVID-19 pandemic.
Brexit and the political uncertainty after February’s General Election have been completely overtaken by the arrival of COVID-19. This impact on business continuity and the financial performance of organisations for the rest of the year are now among the chief concerns of CEOs and directors, who comprise the 3,000 strong membership of IoD Ireland.
Maura Quinn, Chief Executive, the Institute of Directors (IoD) in Ireland, said:
Our latest quarterly survey brings into sharp focus the dramatic reversal in business sentiment from the last quarter of 2019 to the first quarter of 2020. In the space of just a few months, the world as we know it has changed utterly - business leaders are finding themselves in unchartered waters, having to take very difficult decisions to protect the livelihoods of their staff and the immediate business continuity of their organisations in the short term. Down the road the very existence and sustainability of these businesses is a huge concern. Brexit and the uncertain outcome of the General Election have been sidelined for now in the face of the life-threatening arrival of COVID-19.
“We have seen the enormous human cost of sudden temporary lay-offs, redundancies, and the technological, logistical and, indeed, psychological challenges presented by the mass mobilisation of employers and employees into remote working, and all within a very tight timescale of a matter of weeks. “It is to the credit of so many that their response to the crisis has, in the main, been professional, considerate, swift and efficient.”
Key findings in the Director Sentiment Monitor for Q1 2020 include:
- 81% of business leaders believe that COVID-19 is now the ‘biggest risk’ facing their organisation. This compares with the ‘effects of Brexit (22%), ‘political/economic uncertainty’ (21%), and ‘labour sourcing’ (20%), which were the leading risks in Q4 2019.
- 96% of directors are ‘more pessimistic’ in respect of the Irish economy in Q1 2020 in comparison to just 23% in Q4 2019. Just 3% are ‘more optimistic’ now compared to 30% in Q4 2019.
- 83% of business leaders rate as ‘significant’ the potential impact of COVID-19 on their organisation’s bottom line for the year 2020. Just 9% rate it as ‘marginal’ and 6% are ‘undecided’.
- Just 8% of directors think the financial performance of their primary organisation will improve in 2020 compared to 60% in Q4 2019, while 78% think it will not improve in 2020, compared to just 19% in Q4 2019.
- When asked, ‘What keeps you awake at night?’, 38% of business leaders said ‘business continuity’ while 39% said ‘sustainability and long-term growth’.
Maura Quinn added:
“With the country in an unprecedented situation and the wider Irish economy and international markets contracting severely in the face of measures designed to contain and eliminate the enormous public health threat of the COVID-19 pandemic, this is a challenge unlike any other for Ireland’s business leaders. It is also really encouraging to see the Government and many firms offering tangible support to employees and businesses to ensure the wheels of the economy keep moving and can, hopefully, begin recovering once the time comes.”