Four firms a day went bust last month, figures reveal
The number of insolvencies in the country appears to have stabilised but there were still four companies going out of business every day last month, according to new statistics.
The latest figures from InsolvencyJournal.ie -- a website owned by the accountants Kavanagh Fennell -- found that 125 businesses went bust during July, compared to 132 in June.
Despite the fall in insolvencies last month, 917 companies have gone under in the first seven months of the year, an increase of 22pc on 2009 and more than 150pc more than the whole of 2008 when 773 companies ceased trading.
As in previous months, construction was the worst affected industry, losing 41 companies, as subdued private sector activity and a reduction in capital spending continued to cause problems.
Some 277 construction firms have collapsed so far this year, about 30pc of the total, which is up 11pc compared to last year.
Services and hospitality-based businesses have also been badly hit, with 169 and 117 companies shutting their doors respectively so far.
In July, 20 services-based businesses ceased trading while 15 hospitality companies went out of business.
And the retail sector continues to suffer with 18 going to the wall last month.
Six motor companies closed their doors, bringing the total for the year to 28.
Despite the slight reduction in the number of insolvencies, Tom Kavanagh, a partner with Kavanagh Fennell, warned that this was not necessarily indicative of a recovery in the wider economy.
"The general perception is that there is a backlog of distressed cases and insolvencies are likely to increase during the second half of the year," he said.
Low levels of examinerships continue to be recorded in 2010 and not a single company entered court protection last month. So far this year, examiners have been appointed to just nine companies, compared to 21 last year and 15 in 2008.
Although fewer companies are entering court protection this year, their success rate is improving.
Of the nine companies which have entered examinership so far this year, Future Print is the only one that has failed, while a number of high-profile firms such as Irish Car Rentals and Jackie Skelly Fitness have avoided liquidation through court protection. Mr Kavanagh said there were two main reasons for the low levels of examinership applications.
"The tougher regime in the courts and the lack of investment capital available for distressed companies is putting many companies off applying for examinership," he said.