A survey of small and medium-sized enterprises (SMEs) carried out by the Central Statistics Office (CSO) has found that almost a quarter saw their turnover drop by more than 50% in 2020.

In a study on the impact of COVID-19 restrictions that covered almost 2,000 firms, the CSO found that more than 70% of SMEs suffered a fall in turnover compared with 2019.

Of the firms that responded, 56% reported closing at some point during the pandemic in 2020, for an average of 18 weeks. In the accommodation-and-food service sector, 90% of SMEs had to close at some point.

Multiple closures

More than four in ten SMEs reported closing multiple times last year, with repeated shutdowns most prevalent in the services sector.

Government restrictions were cited as the main reason for closure, though reduced demand was also a factor in almost a quarter of cases.

Six in ten firms, however, reported lower costs in 2020 compared with 2019.

Shift online

More than half of the firms took steps to change how they operated due to the pandemic, with 14% of these developing a presence online. The other most common changes were increased hours and the development of new products.

In the industrial sector, firms said that 85% of their pandemic-related spending was on measures to comply with requirements for trading. The remainder went on the development of new products or processes.

In the services sector, respondents said that 70% of spending linked to COVID-19 was on measures to comply with public-health requirements.

Working from home

The study highlighted big differences in how pandemic restrictions affected employees’ working arrangements in various sectors of the economy.

In the professional and IT sectors, almost 80% of staff worked fully or partially from home last year, well above the average of 46% across all firms. In the accommodation-and-food service sector, however, firms reported that 92% of staff were still working on-site.

For the purpose of the study, SMEs were defined as 'firms with fewer than 250 employees'.