Insolvencies up 27% in first half
The number of businesses failing rose by 27 per cent in the first six months of 2010, with four companies closing down every day.
New data from InsolvencyJournal.ie, a website run by accountancy firm Kavanagh Fennell, showed the construction, hospitality, retail and services sectors accounted for the majority of the business failures, and the majority of them were based in the Dublin area.
A total of 792 companies went out of business between January and June, compared to 622 in 2009. In contrast, 773 failures were recorded for the whole of 2008.
Based on this trend, insolvencies could reach 1,800 by the end of 2010.
One in three failures during the six-month period occurred in the construction industry. However, export-led sectors - manufacturing, wholesale and transport - did better than expected, accounting for only 13 per cent of failures.
Forty per cent of the businesses were in Dublin.
The number of receiverships also rose in the first six months of 2010, with receivers appointed to 118 companies, a 174 per cent increase on the first half of last year.
"The latest statistics show that banks are moving into recovery mode to recover distressed loans," Tom Kavanagh, a partner in Kavanagh Fennell. "The figure of 118, however, only reflects corporate receiverships and does not include personal asset receiverships.
"We're seeing a similar increase in personal asset receiverships, if not a bit more, so there were probably twice as many receiverships in the first half of the year if personal asset receiverships are included."
Examiners were appointed to nine companies.
Some 240 construction firms failed in the first half of the year, an increase of 17 per cent on 2009. The sector is predicting further dismal prospects, with the Construction Industry Federation (CIF) predicting output will fall below €7 billion in 2011.
Meanwhile, the car scrappage scheme did nothing to stem the tide of insolvencies in the motor sector, with 22 businesses failing over the period. Thirteen of these were in May and June.