Insolvency rate stabilises but firms feeling 'ripple effect' of downturn
THE number of insolvencies in Ireland may finally be stabilising, according to figures released yesterday.
There were 402 insolvencies nationwide in the first quarter of the year compared to 403 for the last three months of 2009, according to research by the Kavanagh Fennell website InsolvencyJournal.ie.
That number compares to 320 insolvencies for the same period last year and is three times as high as Q1 in 2008.
As might be expected, Leinster was the worst-hit area with nearly two-thirds of total insolvencies this year. Dublin accounted for 168 insolvencies or 42pc of the overall total.
There were 31 failures in Cork in the last three months. Only 14pc of collapses occurred in Ulster and Connacht.
Ken Fennell of Kavanagh Fennell, an accounting firm that claims to be the country's largest specialist insolvency practice, said that sectors previously seen as insulated against the recession are now feeling the full effects of the downturn.
"Corporate failures for Q1 2010 remain largely on a par with the figures for Q4 2009.
"The latest figures however, underline how the ripple effect of the economic downturn is permeating sectors that had previously recorded relatively low numbers of insolvencies.
"For example, IT failures jumped by 200pc, from five to 15 in Q1 2010," he said.
The haemorrhaging in the construction sector continues, meanwhile, with 124 companies going under in the quarter compared to 247 in the second half of last year. There were 206 construction failures in the first half of 2009.
The number of receivers appointed so far this year was 71pc higher than the same period in 2009, reflecting the increase in company failures.
Six companies were granted court protection under examinership this quarter, which was the same as the previous three months.