Firms fail at slowest rate since early 2009
FEWER businesses went bust in August than at any time in the past 20 months, new figures show.
The latest report from InsolvencyJournal.ie -- a website owned by the Kavanagh Fennell accounting firm -- found that 95 companies were declared insolvent in August compared with 125 in July. That was the lowest monthly total since January 2009 -- but it still equates to three failures a day.
However, company partner Ken Fennell warned that August's figure may be an aberration.
"The decrease could be due to a traditional seasonal slowdown in August and insolvencies are likely to increase again in the final quarter of 2010 in line with the 2009 trend. Based on our analysis, we expect the last quarter to show a substantial increase in the number of insolvencies," he said. Last year, nearly a third of all insolvencies were declared in the last three months of the year.
Some 1,012 companies collapsed in the past eight months, with examiners being appointed in only nine cases, although two of those in August were the high-profile Aer Arann and the housebuilder McInerney.
Unsurprisingly, Dublin was the hardest-hit region, with 414 insolvencies, while the construction sector was still struggling.
The rate of decline in construction appears to have been arrested -- 32 firms went bust in August compared with more than 40 in previous months.
The services sector recorded the second highest level of insolvencies with 187 in the first eight months of the year, up 8pc on last year, while the hospitality trade lost 27pc more companies by the end of August than at the same point in 2009.
The retail sector, however, appears to have bottomed out. Insolvencies in the industry have not increased significantly compared with the previous year, with 124 firms going bust between January and August -- the same figure for 2009.