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Only 23% of Irish businesses expect a revenue decrease of 20% or more in 2020

51% of Irish businesses expecting a ‘U’ shaped recovery for economy beyond 2021

39% are looking at restructuring business processes

36% believe that the Covid-19 situation will create opportunities in the M&A landscape


Over 65% of global firms expect Covid-19 to have a negative impact on revenues in 2020. Most firms (around 40%) anticipate a decline of less than 20% in revenues, while 1-in-4 expect a greater than 20% fall in revenues.

This is according to the recent Grant Thornton International Business Report (IBR), providing insight into the views and expectations of more than 10,000 businesses across 29 economies.

Commenting on the report Michael McAteer Managing Partner of Grant Thornton Ireland said “Encouragingly a small number of Irish firms anticipate a positive impact of Covid-19 on their 2020 revenues (16.4%) with a further 19.7% not expecting to see any change at all in their revenue this year and just 23% predicting a revenue decrease of 20% of more. Whilst there has undoubtedly been a decline in revenue and profit expectations, and it will not be an easy year ahead as the economy emerges from lockdown, it is reassuring to see Irish business retains some optimistic outlooks.”

Looking ahead to the next 12 months revenue expectations by Irish businesses are slightly higher than the EU average, 33% v. 27% and on par with global at 34%. According to the report 26% of Irish business are expecting a revenue increase in 2021.

Optimism levels among Irish businesses however have fallen significantly from the same time last year, with only 39% of Irish businesses stating they are optimistic for the outlook of the country’s economy over the next 12 months by comparison to 78% this time last year.

When asked about the market outlook in Ireland for 2021 25% are expecting to see a ‘V’ shaped recovery in 2021 with 51% prepared to experience a slower ‘U’ shaped recovery.

The current environment has driven a large spike in economic uncertainty in Ireland with 56% of Irish firms identifying uncertainty as a business constraint and 39% currently looking at restructuring their business processes.

When asked about mergers and acquisitions, 36% of Irish businesses believe that the Covid-19 situation will create opportunities in the M&A landscape with 27% actively seeking out such opportunities and another 27% open to considering M&A opportunities that may come along.

Speaking on the outlook of the M&A landscape and the results of the survey, Paddy Dillon, Head of Corporate Finance at Grant Thornton Ireland said “We have seen an inevitable reduction in M&A activity since the COVID outbreak. Having said that it is encouraging to see the results of the report. We have closed a couple of deals in April and May and are actively working on a number of live transactions. There is still plenty of capital available for deals and for us it’s now about having the confidence to deploy that capital. I think the gradual easing of the lockdown measures and reopening of the economy will help to generate confidence and we’d be hopeful there will be a strong pickup in activity after the Summer.”

Adaption and resilience

Reflecting the agile nature of Irish businesses, the survey shows how businesses have demonstrated

great adaption and flexibility to deal with the Covid-19 outbreak;

  • 9% have implemented home/ remote working and or flexible working, well above the European Union average of 42.1%
  • 1% have changed working patterns within operations
  • 5% have adjusted business strategies by comparison to 36.4% at a European level and 46.7% globally

One figure standing out in the report is the number of Irish businesses that have made staff redundant/cut pay for staff/furloughed employees/offered unpaid holidays standing at 39.3% by comparison to a global average of 29.2%. 

Following the crisis 42% of Irish business have stated that they will look at improving their crisis management process, 52% will look to implement more use of technology and digital transformation within the business and 57.4% will seek an improvement in organizational flexibility.

Commenting on the results and the impact COVID has had on the adaption of technology Trevor Dunne, Partner and Head of Technology Consulting at Grant Thornton Ireland said “The last few months have resulted in the rapid execution of crisis management processes and plans (that may not have previously existed!) and enforced the widespread adoption of digital transformation.  In Grant Thornton, we are working with company’s at different stages of their digital journey and have witnessed first-hand, the agility and adaptability of these businesses to embrace change rapidly in order to work through the crisis and keep their business functioning. This is evident in the survey results.  As the worst of the crisis diminishes, as a business community we will need to examine the successes and the points of failure, and ensure we have robust strategies, continuity plans and technologies in place, to compete effectively and to rely on should such a situation ever arise again.”

Interestingly Irish business are expecting an increase in R&D this year, with expected increases up to 33% by comparison to 27% the same time last year.

Global Standing

The current environment has driven a large spike in Economic Uncertainty across the globe—66% of firms globally identify economic uncertainty as a business constraint (with nearly 1-in-3 firms identifying it as a major constraint).  Globally only 34% of firms are expecting an increase in revenues in the next 12 months, down from 54% in H2-2019 and comfortably an IBR survey-record low (beginning Q2-2011). The outlook for profitability is similar with only 32% of firms expecting an increase, also a series low.

When reviewing optimism levels across the globe Ireland ranks 17 on the in global standings, with 39% of Irish business stating to be slightly optimistic about the country’s economy over the next 12 months, countered by 23% who are very pessimistic.