DUBLIN — Ireland’s small businesses were hit hard by the coronavirus pandemic and related curbs while sectors dominated by foreign investors grew, according to official estimates.
The Central Statistics Office reported on Thursday that gross value added in “non-MNE [multinational enterprise] dominated sectors” decreased by 19.8 per cent in the second quarter.
The CSO estimated that the “foreign-owned MNE dominated sector increased by 1.1 per cent over the same period.”
The state-funded Economic and Social Research Institute (ESRI) described Ireland’s experience in lockdown as “a tale of two economies.”
This “duality in performance” is down to “a concentration of Irish exports in lockdown-resistant sectors” such as computer services and pharmaceuticals.
“Exports in both of these areas grew year-on-year during the lockdown,” the ESRI said.
In contrast, sectors such as construction and hospitality experienced “some of the largest declines across Europe,” the ESRI said.
Ireland’s low business tax and European Union membership has drawn significant foreign investment in recent decades.
Apple, Facebook and Google have European headquarters in Dublin while dozens of the world’s leading pharmaceuticals and medical supply companies operate factories and research facilities across the island.
Ireland’s government imposed a two-month lockdown from mid-March after a pandemic was declared. Restrictions were eased gradually from late May, though more hesitantly than elsewhere in Europe.
Some curbs were reinstated on Wednesday after a rise in new daily coronavirus case numbers to levels not seen since April.
Restaurants are limited to takeaway or outdoor dining while prohibitions on attending religious services and sports events have been reintroduced.
In its latest quarterly report, Ireland’s central bank on Tuesday said that “levels of domestic-focused economic activity remain well below pre-pandemic levels.”
“Consumer-facing services sectors, such as tourism, hospitality and retail services sectors, which are also more labour-intensive, have been slower to recover,” the bank reported, predicting the country’s economy will contract by 7.1 per cent in 2020.