Reduction in corporate failure rate

The level of corporate failures dropped by a third in October compared with the same month last year, while there was a marginal increase in the number of company start-ups over the same period, according to credit risk analysis firm Vision-net.

However, there was a massive increase in the value of judgments awarded against consumers.

Overall, the figures point to a tentative recovery in the private sector.

‘‘Our data has shown consistent positive signs of business recovery over recent months, and this trend has continued in today’s data,” said Christine Cullen, managing director of Vision-net.

“The number of companies failing is reducing significantly and on the other side of the equation, the number of new Irish companies now being created is also increasing.

“It points to a growing confidence in the Irish business community.

“The budgetary changes on capital gains tax, retaining the lower Vat rate and the ‘start your own business’ initiative should drive this upward trend of entrepreneurship.”

There were 93 cases of company insolvencies in October. Of these 65 went into liquidation and 21 into receivership, with an examiner appointed to the remaining seven.

There was a 32% drop in liquidations compared with last October and a 51% fall in receiverships.

According to Vision-net, the five most volatile industries are professional services, construction, wholesale and retail, manufacturing and real estate, which account for 75% of all insolvencies.

There were 2,777 company and business start-ups for the three months to the end of September, which is a 3% increase on the same quarter in 2012. Of these, 1,708 were registered business names while 1,069 new companies were incorporated, up 17% on the same period last year.

However, even though the number of judgments awarded against individuals has remained static between last month and Sept 2012, there has been a huge increase in the value of judgements.

In Sept 2012, the average consumer debt judgment was €63,000 but in Sept 2013, this had increased by an average of €40,000 to €103,000.

Overall, 450 registered commercial and consumer judgments worth €40.6m were awarded in the courts in September. Of these, 295 were judgments awarded against consumers, worth €30.5m, with the Revenue Commissioners, credit unions, banks, real estate and local authorities making up most of the creditors.

“The increase in the value of consumer judgment this month is one to watch in the coming months, not least because of the potential it has to scupper growth in areas such as retail or hospitality.

“However, the overall signs of growth in the economy remain overwhelmingly positive,” added Ms Cullen.