Fall in number of failed firms points to stabilising economy
THE number of companies going out of business plummeted in February and more firms were also set up, in the latest sign that the economy is beginning to stabilise.
According to business and credit risk analysts Vision-net, 140 businesses went belly up between February 1 and 25 this year. That compared to 206 in the same period last year.
The slump in February follows a 21pc decline in business failures in January, suggesting the economy has at least stopped its rapid decline.
Of the companies that went under this month, the vast majority were liquidations. Some 39 firms went into receivership, while two entered examinership. Unsurprisingly, Dublin had the most failures, at 44pc, while Cork was the next biggest region with 10pc.
About 8pc of failures happened in Kildare.
Continuing a trend that has emerged in recent months, the hospitality sector struggled, with over two-thirds of businesses in that sector now considered "high risk".
The construction sector also struggled as it has for the last number of years.
About 58pc of firms in that sector were deemed to be in danger of collapse during February.
Encouragingly, Vision-net said 3,418 company and business were set up this month – up 7pc on the same period in 2012. That equates to an average of 136 start-ups per day. Of these, 2,277 were registered business names while 1,141 new companies were incorporated.
Vision-net managing director Christine Cullen said February's results had been "encouraging".
"Our figures for this month continue to support the possibility of recovery in the domestic economy.
The high number of start-ups, combined with the on-going drop in the number of companies declared insolvent, is good news.
"Businesses should take these figures as an incentive to continue using smart business practices such as detailed research into their marketplace," she added.
During the month, 554 registered commercial and consumer judgments worth €29.4m were awarded in the courts, Vision-net said.
Of these, 396 judgments worth €26.4m were awarded against consumers in January – about €66,661 per judgment.
This amount is down a third on the average awarded per consumer judgment in December.