Number of failed businesses up 60%

THE number of failed companies soared 60% over the last year while the number of new firms starting up dropped by a fifth.

Although there was an annual fall, the number of start-ups formed in the first three months of this year compared with the final three months of 2008, formations were up 7% to 3,363, according to figures released by Bank of Ireland.

It said the high number of company formations in the first few months of the year demonstrates the willingness of small businesses to chart their own road to recovery.

Head of small business with Bank of Ireland, Damien Young said: “Despite the harsh environment, there are still some real opportunities for small businesses to develop and grow.

“The diversity of businesses set up in the last quarter is promising, and highlights the opportunities available — these businesses have identified new niches and market gaps.”

In the first quarter of 2009 251 companies failed.

The construction/property and finance/insurance sectors saw the greatest fall in new business activity in the period, falling by 34% and 52% respectively.

Mr Young said it is imperative that businesses remain focussed in the coming months.

“History has shown us that more resilient businesses are set up in times of difficulty.

“Nonetheless, we recognise that there will be significant challenges for small businesses throughout the coming year,” he said.

Dublin recorded the highest number of start-ups, at 43% of the quarterly total.

Longford, Offaly and Roscommon, Louth and Waterford were the only counties to buck the national trend and show increases in business start-ups.

Separate figures revealed that in the first three months of this year court judgements against firms for unpaid debts surged by a massive 96% in value terms, according to ICC Information.

The construction sector accounted for 20% in value of all court judgements in the first quarter of 2009, followed closely by telecommunications and business activities, both on 17%.

Munster saw the greatest percentage increase in value of court judgements at 289%, with nearly e3 million lodged in the first quarter of 2009.

Michael Gannon of ICC said: “Judgements against companies are a useful barometer of corporate financial health and a leading indicator of insolvencies.

“We have been watching the value of court judgements against Irish companies increasing significantly since the start of 2008.”