Aspectos distributivos

This section provides data on the impact of the recession in terms of the change in both revenue and employment numbers over the periods January to December 2008 and 2009. It also obtains participants’ views as to the severity of the impact of the recession and whether the recession necessitated significant re-structuring of the business.

Change in revenue and numbers in the workforce

Reflecting the severity of the Irish recession, the majority of firms in the survey (70.1 per cent in 2008 and 84 per cent in 2009) experienced revenue losses over the period in question. Of the remaining firms, 13.6 per cent experienced no change in revenue and 16.3 per cent experienced an increase in 2008. In 2009, 7.5 per cent experienced no change and 8.5 per cent experienced an increase in revenue. From Table 3.1, it is clear that more firms lost revenue in 2009. The average loss reported was 11.8 per cent in 2008, rising in 2009 to a loss of 15 per cent. When firms’ performances with respect to revenue is restricted to those who experienced a loss, the average losses rise to 18.9 per cent in 2008 and 23.4 per cent in 2009. These data indicate the severity of the financial impact of the recession on firms in Ireland.

Table 3.1: Percentage change in the revenue of the business in Ireland due to the recession1 Percentage of firms Percentage change

Jan 2008 – Dec 2008 Jan 2009 – Dec 2009

Loss of 50.0% – 99.9% 4.6 9.7 Loss of 25.0% - 49.9% 14.7 22.7 Loss of 10.0% – 24.9% 31.5 38.9 Loss of 0.1% - 9.9% 19.3 12.7 No change 13.6 7.5 Increase in revenue 16.3 8.5 Average -11.8% -18.1 Median -10.0 -15.0 Lower Quartile -20.0 -30.0 Upper Quartile 0.0 -8.0        1 _{Respondents were specifically asked to state the change in revenue due to the recession.  A small number of}  respondents indicated, however, that they were unable to state that the changes were wholly attributable to  the recession. 

The average percentage change in revenue varied greatly across sectors. The sector most severely hit by the recession, in terms of revenue loss, was Construction, which indicated a mean loss of 24.4 per cent in 2008 and 37.5 per cent in 2009. This compares to a revenue loss of 6.9 per cent in 2008 and 12.4 per cent in 2009 for the High-Tech manufacturing sector, which showed the lowest loss in revenue. As is evident from Table 3.2, all sectors felt the impact of the recession more severely in 2009.

Table 3.2: Average percentage change in the revenue of the business in Ireland due to the recession – by sector

Average percentage change in revenue Sector

Jan 2008 – Dec 2008 Jan 2009 – Dec 2009

Traditional Manufacture -13.4 -20.1

High-Tech Manufacture -6.9 -12.4

Construction -24.4 -37.5

Distribution -9.7 -16.6

Financial & Business Services -14.1 -18.8

Transport & Communication -5.3 -18.6

Hotels & Restaurants -11.5 -14.4

Change in numbers employed

A second indicator of the severity of the recession on Irish businesses is provided by the trend in numbers employed. More than six out of ten firms experienced a reduction in the numbers in their workforce in 2008, while just over three-quarters did so in 2009. In both years, around one in ten firms experienced an increase in the numbers in their workforce. The remainder of firms had no change. As was the case with revenue, the impact of the recession in terms of the change in numbers employed in the workforce was more severe in 2009 than 2008. The average change reported was a reduction of 7.0 per cent in 2008 and 11.6 per cent in 2009. These figures rise to a loss of 13.9 per cent for 2008 and 17.1 per cent for 2009 when only those firms experiencing a reduction are included.

Table 3.3: Percentage change in the numbers of the workforce attributable to the recession2 Percentage of firms Percentage change in workforce:

Jan 2008 – Dec 2008 Jan 2009 – Dec 2009

Loss of 50.0% – 99.9% 2.4 5.5

Loss of 25.0% - 49.9% 8.2 12.3

Loss of 10.0% – 24.9% 25.9 32.6

Loss of 0.1% - 9.9% 27.8 25.3

No change 25.3 14.3

Increase in numbers employed 10.4 10.0

Average -7.0 -11.6

Median -5.0 -10.0

Lower Quartile -13.0 -20.0

Upper Quartile 0.0 -1.0

Again, as would be expected from the trend in revenue, the fall in numbers in the workforce was greatest in Construction (see Table 3.4).

Table 3.4: Average percentage change in the numbers of the workforce attributable to the recession – by sector

Average percentage change in workforce Sector

Jan 2008 – Dec 2008 Jan 2009 – Dec 2009

Traditional Manufacture -8.2 -11.0

High-Tech Manufacture -4.2 -9.0

Construction -22.9 -27.3

Distribution -0.9 -8.8

Financial & Business Services -8.1 -13.2

Transport & Communication -3.0 -6.5

Hotels & Restaurants -9.7 -11.6

Perceptions of the severity of the recession

A final indicator of the severity of the recession is provided by respondents’ perceptions of the severity of the recession. For almost nine out of ten firms (87.8 per cent) participating in

2 _{Respondents were specifically asked to state the change in the workforce due to the recession.  A small}  number of respondents indicated, however, that they were unable to state that the changes were wholly  attributable to the recession. 

the survey, the impact of the recession has been either very or quite severe. Approximately one in eight firms found the impact of the recession to be not at all severe. It was again reported as being most severe in Construction, with almost eight out of ten firms (79.1 per cent) reporting that the impact was very severe. It was reported to be least severe in High- Tech Manufacturing, where more than a third (35.3 per cent) indicated that the impact of the recession was not at all severe and only 19 per cent of firms reported the impact to be very severe.

Table 3.5: Impact of recession on the firm’s business

Impact % of Firms % of Employees

Very severe 42.7 42.9

Quite severe 45.1 44.5

Not at all severe 12.2 12.6

The extent of business restructuring

Just under two-thirds of firms (63.9 per cent) significantly restructured their business as a result of the recession. Again restructuring was most likely to have occurred in Construction firms (80.2 per cent), followed by the Hotels and Restaurants sector firms (78.8 per cent). It was least likely to have occurred in Manufacturing, and in particular in High-Tech Manufacturing (37.4 per cent).