Productivity losses from the Covid-19 crisis are likely to be "more severe" in Ireland because of a lack of remote working capabilities, possibly aggravated by poor-quality broadband in certain areas, according to consultancy firm PwC.
In a survey of chief financial officers (CFOs) here and in other countries, the firm found that nearly two-thirds of Irish respondents expected to see a pronounced drop in productivity due to the lack of remote working capabilities in the month ahead, significantly more than their international counterparts (45 per cent).
Many Irish firms were caught out by the speed of the Covid-19 crisis and failed to get systems in place in time. The problem is also likely to have been amplified by poor-quality broadband in certain areas.
Economy in lockdown
PwC’s survey found an almost unanimous 96 per cent of Irish CFOs reported that the Covid-19 crisis was “causing great concern”, significantly higher than other global CFOs (73 per cent).
With large swathes of the economy in lockdown and no sign of the outbreak being brought under control just yet, the main worry was the financial impact on companies’ operations, liquidity and capital resources (70 per cent). Two-thirds (65 per cent) were concerned about the possibility of a global recession, though these fears were less pronounced among international peers.
The survey of 824 global financial leaders in Ireland and other countries found cost containment (78 per cent) and deferral or cancellation of planned investments (61 per cent) high on the agenda of CFOs here.
Layoffs on horizon
More than a quarter (26 per cent) also said more layoffs could not be ruled out, while a third said they still planned on availing of Government supports.
Perhaps surprisingly, just 4 per cent of Irish respondents were concerned about cybersecurity risks. "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," Garrett Cronin, consulting partner at PwC Ireland, said.
“Before this pandemic hit, many businesses were focused on long-term growth. Now companies are being forced to protect their bottom line,” he said.
“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.”
