Andrew Park, Manager, Economic Advisory, Grant Thornton Ireland
The end of 2020 gave us all great hope that 2021 will be a year where everything will return to some sort of normality. The announcement of the Oxford AstraZeneca and Pfizer vaccines and the ‘Brexit’ deal (in the form of the ‘Trade and Cooperation Agreement’) resulted in a much rosier outlook about the prospects for 2021.
Unfortunately, the upbeat sentiment hasn’t lasted, with lockdowns being reintroduced across the UK to curb the higher levels of COVID-19 infections, coupled with businesses having to adjust to the new self-certification rules and the introduction of border checks as of the 1st of January.
There is a ‘back to square one’ feeling as the same old challenges of coronavirus and ‘Brexit’ regulatory uncertainty continue to present issues for business operations and their respective supply chains.
The reintroduction of lockdown reinforced the ‘work from home’ message and the closure of non-essential retail has led to a substantial drop in footfall throughout the region. Footfall for the week ending the 3rd of January was 22% lower compared to the same week in 2020. In addition, the introduction of border checks and the additional administration has slowed shipments to supermarkets, with some shops reporting a disruption in their supply chain for fresh produce.
Similar issues have presented themselves in the delivery of goods, with delivery companies reporting they have had to postpone some deliveries into Northern Ireland or have informed customers of some delays as checks on goods are undertaken.
In response to these challenges the UK Government and Northern Ireland Executive outlined a range of actions to reduce the potential impact and disruption these will cause businesses. The UK Government in December extended the furlough scheme until the end of April 2021, while also pledging additional funding of £800m to the devolved regions to deal with coronavirus fallout on businesses and the NHS, with £200m of this being available to the Northern Ireland Executive.
While the new year probably hasn’t started off how we had hoped, there is still plenty to give us hope that 2021 will be better than 2020, both economically and societally, with the mass roll-out of the COVID vaccines underway.
As for Brexit, it is hoped these new-year supply chain disruptions are more ‘teething’ problems than long-term issues, as businesses adjust to the new rules and regulations.
For further information or advice, Andrew Park can be contacted at andrew.park@ie.gt.com
Grant Thornton (NI) LLP specialises in audit, tax and advisory services.