Impact of Brexit on insolvencies won't hit till 2020
The true impact of a hard Brexit on businesses may not become apartment until next year, according to Deloitte.
With fewer than 100 days until the UK is due to leave the European Union, David Van Dessel, partner at the consulting group, said that if the country crashes out of the EU without a deal it could have a "material impact" on company bankruptcy levels in Ireland.
This is more likely to be reflected in the 2020 insolvency statistics, he said.
"Directors are very slow to get external assistance when their business is experiencing financial problems. In particular, family companies deal with issues privately," Mr Van Dessel said.
"The natural approach [when a company is in trouble] is to sell more, but sometimes the problem is greater than that.
"For companies in the front line of Brexit, while the financial impact may be quick, there will be a delay in the firm getting to insolvency. For many the last thing they will do is get external advice, making it harder to reach agreements with creditors," he added.
Overall, the number of service sector firms filing for insolvency has jumped in the six months to 30 June.
The sector - which spans industries from bars and hotels to banking - was responsible for two out of every five insolvencies during the period, up 27pc on last year, according to figures from Deloitte.
The majority of these firms are likely to be property-holding companies, Mr Van Dessel said.
Businesses operating in the real estate and property services sector were the second most common industries to be affected by insolvency during the first half of 2019.
At the other end of the scale, the smallest number of bankruptcies were reported in the manufacturing and IT sectors.
Overall, 310 businesses were declared insolvent during the six months, down 29pc on the same period last year.
Creditors' voluntary liquidations (CVLs) were the most popular means of addressing corporate insolvency in the first half of the year, accounting for 206, or two thirds, of the total number.
The most significant shift on a year-to-year basis has been recorded in the number of corporate receivership appointments, which fell to 54 from 83 in the corresponding six months.
Meanwhile, there was a slight increase in examinership appointments, with 16 firms entering the process.
"It is encouraging that there is an increase, albeit a small one, in examinerships over the first half of this year," Mr Van Dessel said. "Analysis of prior periods has shown that the majority of companies who attempt an examinership return successfully to trading and emerge with stronger balance sheets."