Insolvencies fall as 15,000 firms formed

There was an almost 20% fall in the number of insolvencies in all sectors across the economy this year, as over 15,000 companies were formed.

The figures released by risk analysis company Vision-net found that professional services and construction sectors were the industries worst affected by insolvencies in 2013.

The figures indicated that the number of construction firms entering into receivership may have bottomed out. The number of companies failing in the sector was down by 1.1% while the number of real-estate firms declared insolvent has fallen by 2.5%.

Vision-net managing director Christine Cullen said that the last 12 months had seen an improvement in trading conditions.

“2013 can be characterised as a year of improvement for Irish business, as trading conditions recovered and consumer sentiment strengthened,” she said.

“Encouraging also are the number of new companies — over 15,000 — set up in 2013, a 10% growth year-on-year.”

The data showed that the hospitality sector was still facing a very difficult environment, with 65% of restaurants at risk of failing and 54% of hotels rated as being at a high risk of collapse.

“A significant proportion of companies in the hospitality, construction, and IT sectors continue to remain at high risk of collapse,” Ms Cullen said.

“However, budgetary and other economic stimuli such as the lower Vat rate, initiatives for business start-ups, and a revival in the property market should have an impact in the months ahead.

“Indeed, the fall in the number of insolvencies in the construction (1.1%) and real estate sectors (2.5%), while small, are tentative signs of emerging recovery in these sectors.”