Enterprise Ireland has cautioned that 2020 will be very challenging for many Irish exporters due to the outbreak of Covid-19 and Brexit.

The government agency responsible for the development and growth of Irish companies in global markets said that Irish companies trading internationally have been impacted in every market due to the global nature of the pandemic.

The agency said that Covid-19 has had a negative impact on order books and international market confidence with new contracts won by Enterprise Ireland-backed companies declining by 12% in the first half of 2020. 

Enterprise Ireland said that about 1,000 client companies are impacted by Covid-19, with 300 companies who are "very exposed" to Covid-19 and also have high levels of exports to the UK.

Of these 1,000 companies 75% reported that their exports have been impacted by Covid-19 and more than half saw a negative impact on cashflows.

The agency warned that the impact on exporters for the latter half of 2020 will be very challenging and that they face the dual challenge of both dealing with the Covid-19 impact on their business and also the impending Brexit deadline.

Julie Sinnamon, CEO of Enterprise Ireland, said that since the outbreak of Covid-19 many businesses have pivoted in response to emerging market needs in areas such as contact tracing, traveller safety and confidence in airports and hygiene transparency in the hospitality sector. 

"Agility and diversification are essential as we seek to trade successfully in a radically changed world," the Enterprise Ireland CEO said.

But Julie Sinnamon said the second half of 2020 is expected to be one of the most challenging facing Irish businesses in recent history.

"Not only have many businesses been impacted by a significant reduction in customer demand from markets across the world due to Covid-19, but they are also facing the largest structural change to trading with the UK in over 50 years," she said. 

"Brexit is now a reality and from January 1, for the first time, Irish exporters to the UK are going to be faced with new changes to customs procedures, regulatory alignment and, undoubtedly, additional costs," Ms Sinnamon said. 

"Every Irish exporter must now ensure that they take action in terms of securing their supply chains, customer base and meeting new regulatory requirements and ensure they are ready for January 1," she added.

Meanwhile, Enterprise Ireland also today reported strong levels of export performance by its client companies in 2019, up 8% to €25.6 billion.

Exports to the euro zone saw record growth of 15% to €5.6 billion, while exports to North America increased by 16% to €4.7 billion last year. 

It said these performances reflect the agency's emphasis on the importance of diversifying into new markets as a result of Brexit.

A total of 221,895 people were employed in companies supported by Enterprise Ireland last year with 65% of these jobs located outside Dublin.

Julie Sinnamon said that 2019 demonstrated the innovation, ambition and vision that drives the Irish manufacturing and exporting sector. 

"The strong 2019 results mean that many companies began this year in a resilient position," she added.