Market Pulse Q1 2021 Analysis of the key trends in the SME sector, prepared by Fitzgerald Power on a quarterly basis.
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Market Pulse Analysis of the key trends in the SME sector, prepared by Fitzgerald Power on a quarterly basis. Q1 2021
Summary Q1 2021
Economic Update Revenue Pulse
According to the ESRI’s quarterly economic commentary the The total value of seasonally adjusted annual sales increased
Irish economy grew by 3.4% in real terms in 2020 compared in March 2021 versus the same period last year, by 7.3%.
to 2019, despite the impact of the pandemic. This was linked However, the combined results don’t tell the full story. The
to an increase in exports and a fall in imports. Contrasting sector breakdown shows that the pandemic impact has been
covid impacts on the traded and domestic sectors were unevenly distributed.
noted, with strong growth in exports (+6.2%) offset by
significant reductions in consumption and investment
(-9% & -32.3% respectively). The ESRI forecasts real GDP Sales Growth
to grow by 4.4% in 2021 and 5.2% in 2022. Annual change to March 2021
SME Use of Technology %
Vodafone released an SME focussed report, Covid-19 and 40
The Irish SME Sector: Supporting Recovery and Growth,
20
which surveyed 500 SMEs across a wide range of industries
in Ireland. The report revealed the extent to which SMEs 0
relied on technology for survival over the last 12 months.
43% of respondents claim they could not have functioned - 20
productively without investment in technology over the
- 40
past year.
- 60
A Targeted Response to Covid - 80
Ibec has suggested that policies should be implemented to
allow the “experience economy” (hospitality, retail, travel, - 100
food, drink, tourism and entertainment, as well as aspects
of the arts, cultural, sporting and heritage sectors) to
Sector
position itself to overcome COVID challenges. Ibec
recommends the €5,000 per week cap on the Covid Motor Trades +29.5%
Restrictions Support Scheme should be removed and any
Department Stores -24.1%
potential cliff-edge arising from the removal of other state
supports must be avoided. Food, Beverage & Tobacco +0.3%
Clothing, Footwear & Textiles -31.7%
Insurance Hardware, Paints & Glass +30.8%
Industry group Insurance Ireland expects Covid period Bars -80.8%
business interruption insurance claims to amount to
€430 million. The organisation said that €62 million in SOURCE: CSO
claims had been paid out to policy holders to date,
since the crisis began.
Vaccinations
As of Saturday 3rd April, 932,234 vaccine doses had
been administered in Ireland, meaning 13.3% of the
population had received at least a first dose. The
government aims to have a majority of the
population vaccinated by the summer.Consumer Pulse
According to KBC Bank, consumer confidence recovered in March 2021 as Irish consumers focused on post-pandemic
improvements in the economy and jobs market. Household savings are likely to remain higher in future as a result of the pandemic.
KBC Bank Ireland Consumer Sentiment Index, March 2021
120
100
80
60
40
20
0
March 2021 February 2021 January 2021 March 2020
Consumer Sentiment Index Index of Current Conditions Index of Consumer Expectations Economic
Unemployment Financial Situation 12 Months Ago Financial Situation 12 Months Ahead Purchases
SOURCE: KBC ECONOMICS BASED ON KBC BANK IRELAND
Footfall Pulse Business Owner Pulse
Compared to the previous period in 2020, mobility was InterTradeIreland’s Q1 2021 Business Monitor indicated a
down 40% in retail and recreation. degree of cautious optimism from business owners in both
The largest decrease was in Leitrim at 49%, whereas major Northern Ireland and the Republic of Ireland.
population centres Dublin, Cork and Limerick saw 47%, 36%
and 34% drops in mobility respectively.
Business Position
Retail & Recreaction Q4 2020 Q1 2020
19 13
0 19 32 29
33
30
20 30 30
31 27
40 32
60 55
50 47 44
37 33
Overall 40% Dublin 47% Cork 36%
OVERALL NI IRELAND OVERALL NI IRELAND
Limerick 34% Leitrim 49% Largest decrease
Decline Stable Growth
SOURCE: GOOGLE MOBILITY SOURCE: INTERTRADEIRELANDNew Business Pulse
% of Businesses that were Quarterly figures reveal an 88% year-on-year increase in
fully operational retail and wholesale start-ups (438 new companies), with a
total of 6,353 new company start-ups registered in Q1 2021,
an 8% increase compared to the same period last year.
55% 60% 72%
New business registrations
OVERALL ROI PROFESSIONAL 100
SERVICES
80
60
66% 46% 12%
40
CROSS-BORDER NI HOSPITALITY 20
TRADE
0
63% of Manufacturers
- 20
59% of Retail
55% of Construction Industry
SOURCE: INTERTRADEIRELAND Manufacturing 87% Retail & Wholesale 88%
Motoring 41% Health & social work 11%
When asked what the main source of impact on
Transport, storage & communication 33%
their business was, businesses are more likely to cite
Covid-19 alone. Real Estate 9% Finance 8% IT 8%
Hospitality -13% Construction -6%
Impact of Covid and Brexit
SOURCE: VISION-NET
18%
Employment Pulse
31% 31%
52% 14% Official unemployment in Ireland in March 2021 was 5.8%.
39% 1% However, this doesn’t account for people on the Pandemic
7% 6%
Unemployment Payment (PUP). When this is adjusted for
7% 81% actual unemployment was 24.2%.
14%
58%
49% 49%
33% 28%
Impact of Covid
MANUFACTURING
OTHER SERVICES
CONSTRUCTION
& PRODUCTION
PROFESSIONAL
PROFESSIONAL
RETAIL, DIST &
HOSPITALITY
SERVICES
SERVICES
122,300
137,100
24.2%
21.2%
5.8%
5%
Covid-19 Brexit Both
NO. OF PERSONS UNEMPLOYMENT COVID-19 ADJUSTED
UNEMPLOYED RATE UNEMPLOYMENT
SOURCE: INTERTRADEIRELAND RATE
March 2020 March 2021
SOURCE: CSOInsolvency Pulse
There were 111 corporate insolvencies recorded in Ireland in the first quarter of 2021, a decrease from 159 for the same
quarter in 2020. The industries with the largest decreases in insolvencies were, perhaps surprisingly, retail and hospitality.
Construction had the largest increase.
Insolvencies by sector
60
40
20
0
-20
-40
-60
Q1 2021 Q1 2020 % Change
Services Construction Retail Hospitality Manufacturing Wholesale Transport
SOURCE: DELOITTE
Insolvencies by province
Credit Pulse
In the first quarter of 2021 the number of businesses that
required a change in their bank facilities over the previous
three months had risen 2 percentage points from 31% to
33%, when compared to the same period last year.
6
Percentage required change in bank
facilities in last 3 months
11 40
SOURCE: ISME
20
67 0
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21
27 The chart below shows the change in unsuccessful requests
for a change in bank facilities in the previous 3 months,
which increased from 19% in Q1 2020 to 35% in Q1 2021.
40
SOURCE: ISME
Leinster 67 Ulster/Connacht 11
20
Munster 27 Ulster 6
0
SOURCE: DELOITTE Q1 20 Q2 20 Q3 20 Q4 20 Q1 21Fitzgerald Power is a leading financial advisor to the Irish SME sector. We provide accountancy, corporate finance and taxation advice to businesses across the country. We’d love to hear from you so please get in touch if you think we can help. Waterford Dublin Greyfriars 3013 Lake Drive Waterford City Citywest Campus fitzgeraldpower.ie Waterford Dublin 24 info@fitzgeraldpower.ie T: (0)51 870152 T: (0)1 6794772 F: (0)51 871214 F: (0)1 6794775
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