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IMPACT OF COVID SET TO BURDEN THE AVERAGE SME WITH OVER £170K ADDITIONAL DEBT PER YEAR R H


ello everyone and welcome to


the February issue of Irish Manufacturing. I wanted to start this comment by letting you all know that as of the March issue, I will be heading off on maternity leave and passing you on to my successor, details of which will be published next issue. March features include Test &


Measurement, Sensors & Sensing Systems, Industry 4.0/IoT, Applications in Ireland, Springs & Fasteners, Plastics & Injection Moulding, Food & Beverage. If you are interested in contributing please email me on rtucker@datateam.co.uk. Our media packs and feature lists are available for 2021, so please get in touch with myself or Zak if you would like a copy. Take care, Rachel Tucker - Editor


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esearch highlights a growing debt burden and redundancy ‘time bomb’ weighing heavily on


the SME outlook for 2021 – but businesses project significant benefit from policies to stimulate demand and investment Ahead of the UK’s 2021 Budget and Economic


Recovery Plan, new research from Sage, the market leader in cloud business management solutions, has revealed the tough conditions that will be facing small and medium sized businesses (SMEs) well into the second half of 2021. The research highlights how the latest lockdown has further divided the outlook of UK SMEs, with one-third worse off than November, one- third in a similar position and one-third better off. Encouragingly, over half of SMEs believe they have


become more efficient for the long-term as a result of the pandemic; but financial challenges continue to bite. The average revenue hit from lockdown during 2021 so far has been -20 per cent, compared to an average -41 per cent over the course of last year. Over half of SMEs surveyed forecasted that if


‘business as usual’ resumed tomorrow, their productivity would have improved compared to a year ago – with a third recognising digital tools as the most impactful solution to improve efficiencies. There is a clear disparity between appetite and ability to invest for a more productive future – with the greatest priority for SMEs today being investment in technology. 71 per cent of SMEs are not currently in a position to invest at the level they would like to, 42 per cent aren’t able to invest at all. Measures that will drive growth by unlocking these investments, such as financial


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incentives for technology adoption by SMEs, are desperately needed. Overall, the data suggests a raft of major challenges


facing SMEs over the course of 2021, despite a potential loosening of restrictions over the spring and summer. However, policies to stimulate customer demand are predicted to have a significant positive effect. A VAT cut is supported by 71 per cent of SMEs, with a 12.5 per cent cut in VAT projected to support an additional 11 per cent profit and 13 per cent revenue for business who believe they will benefit. With the right measures in place, SMEs are determined to lead the economic recovery. The majority of businesses that are currently unprofitable expect to return to profit in the next twelve months. Paul Struthers, MD Sage UK and Ireland, said: “The


worst economic crisis in three centuries has left a bleak outlook for SMEs. Instead of being a season of new beginnings, spring looks set to further slam the brakes on businesses as support schemes near their end and some loan repayments begin. With a redundancy ‘time bomb’ on the horizon, a significantly increased debt burden is also starting to weigh heavily on the shoulders of businesses desperately trying to recover and invest in their future. “But the majority of SMEs can see green shoots


through a cut in VAT to unlock untouched household spending, giving SMEs the financial breathing space they need and potentially saving many jobs and livelihoods. This is why Sage is calling for a cut to VAT for goods and services supplied by small and medium businesses throughout the spring and summer of 2021.”


4 FEBRUARY 2021 | IRISH MANUFACTURING


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