Almost 80% of businesses in Northern Ireland plan to furlough some or all employees over the next week as revenues plummet and cash reserves are severely hit, a survey showed.

Three quarters of firms reported a serious decline in sales or income over a very short time frame following the pandemic.

Coronavirus has devastated the local economy’s businesses including the hospitality industry.

This survey has highlighted that there is also a startling negative impact on business and the economy which is significant for our future when we emerge from the crisis

Ann McGregor, chief executive at the Northern Ireland Chamber of Commerce and Industry, said: “This survey has highlighted that there is also a startling negative impact on business and the economy which is significant for our future when we emerge from the crisis.

“The main issue is cash flow and it is alarming to see that one in ten businesses who responded to the survey have no reserves set aside and a further 63% have less than three months cash reserves left.”

For manufacturers, ‘just in time’ processes mean cash flow can be tight in normal times, she said.

The business leader added: “This cash flow issue is being exacerbated by slow or non-payments and difficulty accessing the various funds.

“Even where there is some activity on order books, businesses are finding that customers are becoming increasingly reluctant to pay quickly, worsening the cash flow problem.

“Firms may be able to avail of rates relief and furlough staff but they can’t survive without income and in this challenging time are anxious about increasing their debt.

“They also cannot afford to wait weeks or months for reimbursement from the various support schemes to arrive.”

The survey was carried out between April 1-3 2020, three weeks after the World Health Organisation (WHO) declared the virus a pandemic and two weeks after the Chancellor announced a number of emergency schemes to support business.

When compared to the week commencing March 23, three quarters of businesses have seen a significant decrease in revenue from UK customers.

Cash reserves have been severely affected.

One in 10 companies who responded to the survey have none and a further 63% have less than three months’ cash reserves left.

Just 4% have more than 12 months’ cash reserves available.

Over one third of businesses (36%) have closed operations temporarily.

A total of 58% of all respondents intend to furlough at least half of their employees, while 30% intend to furlough all of their staff through the official Coronavirus Job Retention Scheme.

A total of 17% of businesses said they did not intend to furlough anyone.