Irish small and medium-sized businesses may have lost between €6 and €10 billion between the months of March and June due to Covid-19 restrictions, according to a new study.
The study by the Economic and Social Research Institute on the impact of the pandemic on Irish companies was published today.
Over a million people in Ireland work for small and medium-sized businesses, or SMEs.
The ESRI says Covid-19 has delivered an “unprecedented shock” to these employers, the speed and scale of which “are outside any experience bar wartime”.
Drawing on official data and industry surveys, the ESRI has attempted to quantify the scale of this shock.
It estimates that from March to June, between €6 and €10 billion in revenue may have been lost by these companies with many of them filling in this gap by drawing on their own reserves.
Depending on how the economy fares under Covid-19 across the rest of the year, that shortfall could rise to between €8 and €12.3 billion.
The study also highlights that one of the most exposed sectors – hotels and restaurants – also carries “considerably higher than average” debts.
While just under 70% of SMEs make a profit in a normal year, that dropped to 58% for hotels and restaurants.