Business Signs of Life Series One: State Support, March 2020 to January 2021

The ‘Business Signs of Life’ series has been created by the CSO to examine changes in the Irish Business Economy during the COVID-19 pandemic using available administrative data sources, which can provide more timely indicators than traditional statistical sources. Annual statistics on the business population are generally published with a time lag of 18 months, for example, the 2018 Business Demography results were published in July 2020. However, changes in business activity have taken place more abruptly in 2020/21 and timelier statistical measures are required.

Series One of ‘Business Signs of Life’ reports on the interaction between employment-related payments and business activity. The release examines the period from March 2020 to January 2021. This series examines the enterprise sectors which have been most impacted by the pandemic and its associated restrictions. The results represent exploratory data matching and analysis by the CSO based on data from the following sources:

• The CSO's Central Business Register (CBR)
• Revenue’s real-time PAYE Modernisation data (PMOD)
• Pandemic Unemployment Payment (PUP) data
• Data from the Temporary Wage Subsidy Scheme (TWSS) and Employee Wage Subsidy Scheme (EWSS)

Because this is an exploratory analysis, based on linking a number of new data sources, the results are published as a CSO Frontier Series output. The initial base population of enterprises in this bulletin refers to the 2018 Structural Business Statistics (SBS) population, which covers a total of 281,408 enterprises. However, the analysis of employment-related payments relates only to enterprises with persons engaged and therefore enterprises with zero persons engaged were excluded from the analysis. As a result, 38,727 enterprises were excluded and all proportions in this release relate to a base population of 242,681 enterprises.

Annual business statistics are published about 18 months after the reference year. The reason for this time lag is that the figures on active enterprises depend on processed tax return data supplied to the Revenue Commissioners, which businesses have 11 months after the reference year to submit. Therefore, some intrinsic timing issues influence the base population. Since the enterprise population is based on the reference year 2018, some enterprises may have ceased trading and new enterprises commenced over the period 1 January 2019 to 15 March 2020. Due to these time-lag differences the usual demographic changes in the business population have not been measured in establishing a baseline for this report. The extent to which this has occurred cannot be accurately assessed until source data becomes available. For comparison, the most up-to-date number of enterprise deaths for a one-year period refers to reference year 2016, when there were 14,629 enterprise deaths as per the CSO’s Business Demography release. Given this limitation, it is likely that the proportional estimates of use of the State schemes, i.e. the Wage Subsidy Scheme and the Pandemic Unemployment Payment (PUP), due to COVID-19 will be underestimated because of these previously ceased companies.

Definitions/Concepts

• COVID-19 income support intensity is the percentage of personnel with the enterprise who are availing of the Wage Subsidy Scheme (WSS) or associated persons on the Pandemic Unemployment Payment (PUP).
• The term ‘associated persons’ is used in this release in relation to PUP recipients. The PUP is a support for employees and self-employed who have lost their employment due to the COVID-19 pandemic. As it is the individual who is in receipt of the payment, and not the enterprise, this statistical analysis counts the enterprises where persons engaged received PUP. As such, these ‘associated persons’ are included as personnel with their most recent enterprise.
• To qualify for PUP, self-employed must have their trading income ceased due to COVID-19 or trading income has collapsed to the extent that they are available to take up other full-time employment.
• While the PUP scheme is paid weekly, to examine it in conjunction with the WSS it was necessary to aggregate it to a monthly basis. As the scheme is paid on the Tuesday of each week, this was taken to represent the ‘pay date’. This may result in some natural anomalies in the data aggregation, e.g. there are five weeks of payment coded to June, but only four to July.
• The Wage Subsidy Scheme (WSS) refers to the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS) as the TWSS was discontinued at the end of August 2020 and replaced with the EWSS.
• To qualify for the TWSS an employer must be experiencing significant negative economic disruption due to COVID-19, be able to demonstrate minimum of a 25% decline in turnover, be unable to fully pay normal wages and normal outgoings and are retaining their employees on the payroll.
• The EWSS is available to enterprises whose turnover has fallen 30% due to COVID-19.
• In some tables in this release, aggregates of NACE Rev. 2 categories, such as Tourism and Cultural & Creative Industries are presented. For more information see Background Notes.