Toni Forrester, chief executive, Letterkenny Chamber; Redmond McFadden, president, Derry Chamber; Jimmy Stafford, president, Letterkenny Chamber; and Paul Clancy, chief executive, Derry Chamber
81% of businesses on both sides of the border in the north-west have said they will not be hiring new staff or expanding their workforce within the next year, a major new survey has found.
A joint survey of over 130 north-west businesses between the Londonderry and Letterkenny Chambers of Commerce revealed serious challenges for companies in the region over key issues like Covid-19 and Brexit.
A further 58% of companies have said they envision making cuts this year to protect their business and already badly hit revenue streams.
The chambers are calling on the governments in Stormont, Westminster and Dublin to work collaboratively with business to reach solutions around pandemic restrictions which allow companies to continue trading, or to properly compensate them if their doors are forced shut or they experience a fall in trade.
Despite the current dominance of Covid-19 for businesses on both sides of the border, firms are still seriously concerned about the potential impact of the end of the transition period at the end of this year also.
72% of respondents said Brexit would have a damaging and negative effect on their businesses in both the short and long term.
Businesses have several outstanding concerns ahead of December 31 including increased paperwork and bureaucracy, barriers to trade, loss of business and customers, exchange rates fluctuations, supply chain interruptions, and access to skills and workforce.
A significant proportion of north-west businesses – over a fifth – have not made any specific preparations ahead of the end of the transition period, while only 5% have reported signing up to the UK Government’s new Trade Support Service.
In a joint statement, chief executives Paul Clancy, Londonderry Chamber and Toni Forrester, Letterkenny Chamber said the survey did not paint a pretty picture.
“The results of this survey make for sobering and deeply worrying reading. While the impact of Covid-19 has been clear for all to see, the evidence of its devastating impact on our entire regional economy has been laid bare.
"At a time when redundancies and job losses are unfortunately inevitable and rising, it is concerning but unsurprising that over 80% of firms will not be hiring over the next 12 months.
"Governments across these islands need to put in place the necessary schemes and supports which will shield one of Ireland’s historically most deprived regions at a time of growing unemployment.
“Our survey has highlighted the importance that government support schemes have played in keeping our local businesses afloat since March. 81% of respondents told us that, without these schemes, it is likely that their businesses would have been lost during the pandemic.
"Even with these schemes, every business reported having lost significant percentages of their revenue over the past six months.
“New restrictions imposed in the north-west recently on both sides of the border are starting to take effect and we have thankfully started to see a significant reduction in Covid-19 cases.
"However, this has come at a serious cost to our small businesses across the region. Going in and out of lockdown will be fatal for hundreds of businesses. They are just about coping as it is.
"While we are grateful for the recent support measures announced by the Finance Minister and the amended Job Support Scheme by the Chancellor which will be available from November, government support needs to be dramatically stepped up for Northern Irish businesses.
Committed, comprehensive and sustained state support is needed - and needed immediately - to save jobs and protect livelihoods.”
The business leaders said Covid-19 remains the immediate anxiety for business owners, but a slightly higher percentage of respondents – 84% - said that Brexit posed the greatest challenge to the north-west region over the next 12 to 24 months.
"Despite the huge problems that Covid presents, this finding is no surprise. Just over two months until the end of the transition period, the future trading environment is as an unclear as ever.
"62% of businesses said that they were either unprepared for Brexit or unsure what they needed to do. There are so many unknowns remaining and, with business capacity now focused almost exclusively on responding to the impact of the pandemic, time is quickly running out to prepare local companies.
"We are again pleading with the UK Government to deliver clarity and certainty for our local economy and ensure every effort is taken to guarantee uninhibited trade across our islands.”
"The chambers have also welcomed the recent funding allocation of €500m over five years to the Taoiseach’s Shared Island Unit and said the Irish Government should commit to investing public funds in the north-west.
Mr Clancy and Ms Forrester said the Shared Island Unit is a welcome commitment from the new coalition government to the prosperity of the entire island, north and south.
"The north-west has been promised much by successive governments in both Dublin and Stormont over the years but with little delivery. This ringfenced funding is a refreshing signal of intent by the Irish Government and we will be writing to the Taoiseach to ensure that the north-west gets its fair share of this investment.
Enhancing our infrastructure, improving our connectivity, strengthening links between our higher and further education institutions, and creating investment opportunities for our local companies can transform our region for the better at a time of significant upheaval and uncertainty.
“The Londonderry and Letterkenny Chambers are committed to closer working for the benefit of the entire North West region. By combining our energies and our expertise, we can tackle the challenges of Covid-19, Brexit and everything else in between in partnership,” they added.
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