Irish Government Supports saved 4,500 companies during the pandemic.
Act Now Report
Pandemic supports offered by the Irish Government have saved at least 4,500 Irish companies from going bust, according to an analysis by PwC, as part of their report ‘Act Now: From recovery to growth. Using extensive data analytics and statistical modelling, they undertook research that involved a comprehensive analysis of over 18,000 business failures and insolvencies over the past seventeen years. The report found that company failure rates in Ireland fell to a 17-year low last year as the Government’s support propped up many sectors.
This research indicates that at least 4,500 businesses have been saved from going under due to these pandemic supports. During 2020 – 2021, approx. Ten billion euros was paid under the Employee Wage Subsidy Scheme (EWSS, formerly TWSS) to almost 120,000 businesses. The insolvency rate, including liquidations and receiverships, was 14 per 10,000 companies last year. That rate was down 87% from its peak in 2012.
Speaking on Rte’s Business News, Ken Tyrrell, PwC Ireland business recovery partner who co-wrote the report, said the sectors that benefited most from State support during the crisis were retail and hospitality. Their research shows that Retail, Hospitality and Construction had a much lower than anticipated level of insolvency, which may be demonstrated the success of Government supports targeting these sectors.
The lowest rates of insolvencies per 10,000 during 2021 were in the Information & Communications, Professional, Scientific & Technical sectors due to these workers’ strong performance and ability to quickly move to work from home during the pandemic- at SD Worx, formerly Intelligo, we made the transition in a week!
Ireland also had significantly fewer compared to the UK. Ireland’s insolvency rate for last year was 11 liquidations per 10,000 companies, with the UK nearly double that rate. PwC’s analysis reported that the UK has historically tended to be 35% higher than Ireland regarding insolvencies per 10,000 companies.
The summarised analysis of the report indicates that many businesses are now shifting their focus towards recovery and growth, so overall it could have been much worse. The report shows that 50 additional businesses would have failed every week throughout the pandemic without government support. Many of these businesses should thrive in a post-crisis environment, but some may struggle or fail as these supports dry up. Quoting the report;
“While these businesses have survived, they are not out of the woods yet and will require targeted supports to repair their balance sheets and work through the repayment of accumulated debts.”