Company formations ‘an encouraging sign’

ENCOURAGING signs are being seen with an improvement in the number of company formations.

The latest statistics from ICC Formations show that the number of new companies incorporated in the three months to the end of September was almost 2% less than the same period last year.

These figures are “encouraging” according to ICC when compared to the earlier two quarters in the year when formations plunged 18.4% and 20.2%.

Head of professional services at ICC Formations Jon Rock said: “The first six months of 2009 saw a year-on-year decrease in company formations of 21%. However, quarter three has shown signs that the economic downturn may be easing with a drop of only 1.9% which should be interpreted as a positive development.”

Business activities, with 31%, account for the majority of new companies being formed, followed by community, social and personal services at 9.7% and wholesale at 9%.

The property and renting sector continues to be one of the hardest hit with a drop of almost 39% when compared with the same period last year.

There is, however, evidence of growth in telecommunications, education and the agriculture and fishing sectors.

Mr Rock said 2009 has been a difficult year for company formations, but some positive signs are now being seen with September figures overtaking those of last year.

“Hopefully this trend will continue into the final quarter of 2009,” he added.

In the third quarter of this year there were 392 company insolvencies, according to insolvencyjournal.ie