Business failures double in 2008

COMPANY failures more than doubled last year while the number of start-ups dropped by 21%.

The bank’s head of small business, Damien Young said the outlook for this year remains tough after a challenging end to last year.

The construction, real estate, finance and insurance sectors saw the greatest fall in new business activity in 2008 dropping by 42%.

Last year 15,000 new businesses were formed, a drop of 21% on the pervious year. It is expected that 2009 figures for start-ups will be broadly similar.

“2008 has been a tough year for businesses, particularly in the final quarter of the year, where there was a 27% decrease in the number of start-ups, compared with last year,” said Mr Young.

“There will be significant challenges in 2009 for small businesses, but it is imperative that viable businesses remain focussed in the months to come. Businesses must have a clear customer focus, be innovative in reaching their customers and maintain robust financial disciplines,” he added.

Dublin recorded the highest number of new start-ups last year, registering 44% of the annual total.

In Dublin the number of new firms formed dropped by 1,170 while in Cork start-ups established fell by 462 last year.

Numbers fell by 151 in Limerick and by 148 in Galway.

Meanwhile, just one in five Irish firms are prepared for the innovation required to cope with the downturn, according to research by the Irish Management Institute (IMI).

Professor John Bessant, who leads the IMI on innovation, said Irish firms must do more to adapt in the economic downturn.