The number of corporate insolvencies in the State last year was 26 per cent lower than a year previous, according to figures compiled by professional services firm Deloitte.
There were 568 corporate insolvencies last year, down from 767 recorded in 2018 and the 1,684 from 2012. Some 37 per cent of insolvencies last year were in the services sector, followed by 17 per cent in the construction industry and 15 per cent from the retail sector.
"Whilst trading difficulties caused by a range of external and internal factors continue to play a notable role in corporate insolvency numbers across all sectors, legacy debt issues and over-exposure to the property market and property crash of 2008 continues to be a prominent feature," said David Van Dessel, a partner at Deloitte.
The mixture of insolvencies last year included both young and older companies. Some 22 per cent of the insolvencies related to companies less than five years old, 23 per cent related to those in the five to 10 year bracket while 26 per cent were in the 10 to 20 year bracket. This, Mr Van Dessel suggests, indicates that “majority of insolvent companies are in the five to 20 years old bracket rather than in the start-up sector”.
Creditors voluntary liquidations accounted for the majority of insolvencies last year, representing 64 per cent of the total, a slight fall on the previous year. Receiverships, meanwhile, accounted for 16 per cent while High Court wind up petitions accounted for 14 per cent.
Geographically, the highest number of insolvencies were in Leinster (63 per cent) with 24 per cent in Munster, 9 per cent in Connacht and 4 per cent in Ulster.
“It is evident that corporate insolvencies are continuing in a downward trajectory, which we expect to continue in 2020. This is not surprising given the current economic climate, but what has not changed is a continued reluctance within the business community to adopt corporate recovery options when faced with significant financial challenges,” Mr Van Dessel said.
“It is likely that as we move into 2020 and beyond and as the economy continues to grow, legacy debt insolvencies will continue to be displaced by more traditional business failures, rooted in factors such as poor trading performance, weak cost control and inadequate working capital management.”