Four companies a day going bust, finds report
The majority (90%) of private companies expect their businesses to improve over the next year, while more than half (57%) are planning for the upturn, according to a survey carried out by PricewaterhouseCoopers (PwC) and Dublin Chamber of Commerce.
But statistics compiled by InsolvencyJournal.ie show that insolvencies for the year to the end of April have increased 27% over the same period of 2009. There have been 532 recorded company failures this year, up on the 419 that failed between January and April 2009.
However, PwC private company services partner, John Dunne, said: “Over the last year, private businesses have cut their cloth to survive the economic downturn. The survey suggests that Irish private businesses are now shifting their focus from survival to growth and are taking action to plan for the upturn. Despite continued price competition and funding challenges, companies are clearly looking to develop new customers and markets.”
The figures show 125 companies went bust in April, down 15% from the March total of 147 insolvencies. Dublin accounts for 42% of all insolvencies.
Ken Fennell, a partner with Kavanagh Fennell, believes April may be a seasonal trend, as there was a similar drop in insolvencies between March (129) and April (99) last year.
“It is too early to say whether the decline in failures indicates an improvement in the economy or whether it’s just a seasonal dip in figures. The number of insolvencies per month is still a cause of concern with four companies going bust per day.
“The construction industry continues to be the worst affected. The first tranche of loans have now been transferred to NAMA so it will be particularly interesting to monitor the levels of construction insolvencies in the coming months,” he said.
IBEC economist Fergal O’Brien said while some sectors of the economy were showing signs of improvement, hopes for a quick recovery were premature.
Receiverships fell from 21 in March to 9 in April but are well up in the first quarter of 2010 compared with 2009. Receivership appointments are up almost 133% from 31 last year to 72 this year.
The number of receivership appointments so far this year has already surpassed the total for 2008.
