Ed Sibley: Braving the storm: the unprecedented challenges facing SMEs

Speech (virtual) by Mr Ed Sibley, Deputy Governor (Prudential Regulation) of the Central Bank of Ireland, at the Small Firms Association Webinar, 4 November 2020.

Central bank speech  | 
06 November 2020

Good morning. I would like to thank the Small Firms Association for inviting me to speak with you today. I am grateful for the opportunity to listen and learn from your experiences in these exceptional times.  

Small and medium size enterprises (SMEs) play a vital role in the Irish economy and communities across Ireland. SMEs the backbone of the Irish economy representing 99.8 per cent of all active enterprises, having over 1 million employees, (67.5 per cent of total employment in the Irish business economy and producing 37.3 per cent of gross value added (GVA) in the economy.  SMEs are the employers of an even higher majority of the labour force in the construction, services and distribution sectors of the Irish economy. Small businesses are present in all sectors in the Irish economy delivering the goods and services we rely on in our daily lives. 

SMEs are currently operating in a very difficult and uncertain environment.  The measures put in place to contain the COVID-19 pandemic have required many businesses to close completely, or to implement necessary but stringent social distancing measures, with consequential impacts on revenues. There has been an unevenness in the size of the associated economic shock across sectors, with firms in some sectors such as the accommodation and food sector continuing to report large falls in income relative to pre-pandemic norms.