The number of company failures fell sharply in the second quarter, with 30 per cent fewer company closures than in the corresponding quarter of 1998, according to Dun & Bradstreet.

Some 109 companies collapsed in the second quarter compared with 157 in the second quarter of 1998. The second-quarter outcome showed a fall of just under 40 per cent in the number of failures compared with the first quarter of the year when 178 companies failed. Dun & Bradstreet managing director Mr Greg Connell said Irish companies benefited from the combined effect of a four percentage point cut in corporation tax and the sharp interest rate reductions in the lead-up to European Economic and Monetary Union.

Describing the second-quarter figures as encouraging, he warned that company failures in the first six months of 1999, though down on last year, were still over 2 per cent higher at 287, than in the first six months of 1997. There were 333 failures in the first half of 1998 and 281 in the first half of 1997.

"Despite excellent economic growth over the last two years corporate failures are a real risk, he said.

Dun & Bradstreet defines as failures companies which have gone into liquidation. It does not include companies which are set up, undertake a small number of transactions and then cease to operate but are not wound up. There were hundreds of these companies which were struck off the Companies Register every year, Mr Connell said.

Dun & Bradstreet expected to be able to provide a breakdown of failures by geographic region and by size of company by the end of the year, he added.