The closures keep coming as Ireland deals with the economic impact of the pandemic

This afternoon’s main points for business as markets continue to drop during the Covid-19 pandemic.

By Philip Connolly Editor, Fora
IN THIS TURBULENT time, Fora is going to bring you updates every morning and evening on the most relevant issues for Irish business dealing with the outbreak of Covid-19. Here are the main points this morning, March 23 at 5:30 pm. We want to know how your business is dealing with the outbreak, drop us a line at news@fora.ie 

It has been another rough day for the business community, both locally and internationally, as several businesses have announced indefinite closures while global markets fall. 

Our colleagues at TheJournal.ie have the latest details as gardaí and emergency services this weekend stressed the importance of social distancing and warned people about congregating in large groups. 

The closures keep coming

McDonald’s is among the latest businesses to announce that it is to close all of its restaurants across the UK and Ireland for an indefinite period as a response to the coronavirus crisis. 

Other restaurant and cafe chains are set to join the food giant, with Supermacs, Starbucks, Subway, Beschoff Bros and Krispy Kreme all set to close their doors.

Footfall in Dublin city dropped by 65.8% between last Monday and yesterday, according to new data from Dublin Town, as retailers big and small have elected to close their shops due to coronavirus fears, with all pubs also shut and most restaurants also closed.

Bank of Ireland has announced that 101 branches across the country would close after it saw a reduction in footfall and an increase in demand from customers for other supports. It also said that 161 branches would remain open and that staff from temporarily closed branches would support some of the bank’s larger branches and help manage the customers who needed support for mortgage and SME loan payment breaks.

With travel curtailed, airlines continue to suffer. Stobart Air, the carrier that operates Are Lingus’ regional services, will stop flights to Scotland this coming weekend due to what has been described as an “unprecedented” drop in demand. The company said it would continue to operate flights between Dublin and Kerry and Dublin and Donegal as part of its public service obligations.

Meanwhile, some businesses are switching up operations, as sportswear company O’Neills announced it will start manufacturing scrubs to help healthcare staff during the Covid-19 crisis. Last week several distillers also changed tack to produce sanitiser.

French design houses Yves Saint Laurent and Balenciaga are also shifting their attentions from high fashion to producing surgical face masks to aid the global coronavirus assault, their parent company Kering said. 

Economic fallout

The world economy is facing “severe” economic damage from the coronavirus pandemic that could be even more costly than in 2009 and will require an unprecedented response, IMF chief Kristalina Georgieva said earlier today. 

In comments to finance ministers from the Group of 20 nations, Georgieva called on advanced economies to provide more support to low income countries, and the IMF stands “ready to deploy all our $1 trillion lending capacity.”

As much of the world faces mass shutdowns, Georgieva warned the outlook for global growth in 2020 “is negative – a recession at least as bad as during the global financial crisis or worse.”

Ireland, along with the rest of Europe, is dealing with the depth and breadth of the impact on the economy. 

Neil Gibson, the chief economist at EY Ireland, said that preliminary estimates show that “much if not all, of the island of Ireland’s hard-fought job gains over the last 5 years could potentially be lost in the three months from the start of March”.

“The critical question is will they be temporary or permanent losses? The uncertainty over how long the lockdown will remain in place makes it impossible to say, but there are sadly likely to be a significant number of businesses ceasing to trade. This is a global problem, so unlike during the financial crisis, talented people cannot leave the island to find work elsewhere which will add to the spike in unemployment levels,” he said. 

He added that the ‘bridging’ bill in response to this crisis will be enormous.

“The key question is who should take on the debt – government or business? The emotional strain for many business owners in deciding if they can take on debt with such an uncertain road ahead means that where possible, government should take the debt. Or more accurately civil society should take the strain,” he said.

“This would mean payroll support and direct aid are more valuable than lending and credit. That is not to say that lending institutions do not have a part to play in addressing the crisis, and forbearance on payments and debt servicing will be required.”

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EU finance ministers agreed today to suspend the bloc’s stringent rules on running public deficits, a historic first that allows crisis-struck governments to spend freely to tackle the impact of the coronavirus pandemic.

Stock markets on both sides of the Atlantic resumed their downward trend in volatile trading today, as a rollout by the US Federal Reserve of another flurry of measures for companies failed to turn the fearful mood around. 

  • Ireland’s Iseq was down by more than 5% early in the day before recovering somewhat to close at a fall of 2.8%
  • London’s benchmark FTSE 100 index closed down by 4.3% 
  • Frankfurt’s DAX shed 2.1% and the Paris CAC 40 sank 3.3%
  • Wall Street stocks were deeply negative again
  • Hong Kong stocks plunged with investors spooked about the economic impact of the coronavirus pandemic despite the announcement of massive emergency stimulus measures worldwide. The Hang Seng Index plummeted 4.86%
  • Mainland China’s benchmark Shanghai Composite Index also closed down, dropping 3.11%

Get out of your PJs

As many people wake up to a second week of working from home, the reality of our new situation is beginning to set in. 

None of us probably realised how quickly many of us would be working remotely, which is not always as simple as it seems. John Cunningham of Morgan McKinley has written some practical advice on balancing life at the home office.

Amid all the disruption that Covid-19 crisis has had on our daily life, it’s understandable that brands might be fearful of their digital communications. Gráinne Glenny of Boola Pr has a look at how and why brands should continue their digital efforts – not only to get to the other side of this crisis as best they can but to suffuse and encourage the spread of useful information, community spirit, goodwill and positivity in these trying times.

Something you might have missed

After two decades in Irish television, Ronan McCabe is reintroducing himself as the new CEO of Animation Ireland. We sat down with the new man at the top of the industry body to talk through an animated career and his hopes for the burgeoning sector.  

Get our Daily Briefing with the morning’s most important headlines for innovative Irish businesses.

Note: This piece will be updated with additional information during the day. With reporting from AFP