The rate at which businesses are going bust continues to decline, with corporate insolvencies down 15 per cent in 2017, according to research from Deloitte.
There were 874 business insolvencies last year, its research shows, down from more than 1,000 the previous year. Last year’s rate was about half the peak recorded at the height of the crash, in 2012.
About six in 10 corporate insolvencies were creditors’ liquidations. A further 28 per cent were receiverships. There was a marked uptick in the number of court-appointed liquidations at 63, up from 18 the previous year.
Court liquidations are usually pursued by the Revenue Commissioners on foot of winding-up petitions due to unpaid taxes.
Examinerships accounted for only a small number of insolvencies, at just 29. Of these, eight were still in the process at the end of the year. Of the 21 who had exited, 11 had resumed trading and 10 had gone into liquidation.
The services industry accounts for the largest slice of all insolvencies, at almost a third of the total. Of these, more than a fifth were insolvencies of real-estate agents and brokers.
The construction industry, the retail sector and the hospitality industry each accounted for 10-12 per cent of all insolvencies last year. The manufacturing industry, meanwhile, was the source of just 5 per cent.
As in previous years, two-thirds of all corporate insolvencies in 2017 were in the Leinster area, with almost a fifth in Munster.
"The drop in the level of corporate insolvencies is in line with the average rate of decrease observed over the last five years," said David Van Dessel, a partner in the restructuring division of Deloitte.
Despite the low level of examinerships, he highlighted the fact that the number of examinerships doubled last year, albeit from a very low base.
“It seems that the message that this restructuring route is offering companies a real chance at survival is getting through and I hope to see this figure increase again during 2018. We know from the figures that half of companies who choose this route survive and that has to be a motivator for any company director,” he said.
He attributed the uptick in examinerships to a greater availability of risk capital, and predicted more struggling businesses would try this route to survival.
“We know from our nearest neighbours, the UK, that this is popular with one in seven of all corporate insolvencies going through this route, compared to one in 33 here in Ireland, so there is plenty of room for growth,” he said.