Retail and services sectors begin to feel recession's full force
COMPANY failures more than doubled in the first half of the year as the brutal impact of the recession spread from the construction sector throughout the SMEs landscape.
New figures from insolvencyjournal.ie show 702 companies went to the wall in the last six months -- by far the highest half-yearly total since records began.
Collapses were greatest in the battered construction sector, accounting for 211 of the insolvencies, but latest figures show construction failures are beginning to slow.
In April, 42 construction firms went into liquidation. But by May that had fallen to 34, before dropping to 26 in June.
There was no such reprieve however, for the services and retail sectors, which are fast becoming the staple constituents of liquidators.
The number of services companies going into liquidation rose 82pc between quarter one and quarter two, giving a half- yearly body count of 113 companies.
The retail sector contained its failures to 101 businesses, but the number of retailers going into liquidation more than quadrupled between quarter one and quarter two.
The other significant sector was hospitality, where a spate of hotel and restaurant closures helped the overall number of company failures to reach 97.
"The construction industry seems to be bottoming out, and now the financial crisis has started to hit the mainstream," a spokesman for insolvencyjournal.ie said.
The doubling of company failures came as the numbers on the live register rose from 129,900 last June to 277,400 in June 2009, suggesting a strong correlation between job losses and company failures.
The latest insolvency statistics also show a significant decrease in the number of insolvencies through receiverships, where secured creditors like banks move in on the assets of a company. The volume of receiverships dropped 47pc between quarter one and quarter two.
The spokesman said the fall could be a "strategic manoeuvre" by the banks ahead of the soon-to-be established National Assets Management Agency, which will take over bad loans.
Insolvenyjournal.ie was founded by liquidators Kavanagh Fennell earlier this year to track company failures in Ireland.
- Laura Noonan
