Accommodation and food services face a ‘bumpy road’ as Covid business support ends
Small businesses face “a rocky road” as government support for the pandemic winds down and cost pressures rage due to war in Ukraine, the group has warned. companies representing banks.
The Banking and Payments Federation of Ireland (BPFI) said the recovery of the accommodation and food service sector, which was among the hardest hit by Covid health restrictions, will be badly affected as wages for 70% of the sector staff were supported. through the Employment Wage Subsidy Scheme (EWSS).
Growing cost pressures will now make the recovery more difficult.
“The accommodation and catering sector, in particular, is pointed out as facing significant challenges with activity in the sector at the end of 2021 down by around 15% in value and 20% in volume compared to the first quarter of 2020. , a performance which now looks set to worsen further as cost inflation continues to rise and state aid is set to run out within weeks,” the group said. businesses.
The BPFI said nearly €7.7 billion had flowed into businesses through EWSS by the end of last month, with accommodation and catering businesses accounting for €1.9 billion.
In addition, 95,000 companies appealed to the tax debt warehousing scheme for 3.1 billion euros in debt, he said.
“With a record number of people in employment, data for 2021 shows the Irish economy grew by 13.5%.
“However, as our SME Monitor clearly shows, this recovery is not consistent across the board and many industries, especially businesses in the food and hospitality services industry, face a difficult road to recovery. recovery as we emerge from the pandemic,” said Brian Hayes, managing director at BPFI.
The economy faces higher price levels for some time, Hayes said.