Total number of company insolvencies lower than expected last year 

PwC figures shows there were 852 insolvencies recorded in 2024 — down from the over 900 expected. File picture: iStock

There was a lower than expected number of business insolvencies recorded during 2024 as upward trends towards the end of the year slowed, new figures published by accountancy firm PwC shows.

During the course of 2024, PwC had been projecting there to be over 900 business insolvencies recorded by the end of the year. However, the firm has now said there were 852 insolvencies recorded last year which is still 16% higher than 734 which took place in 2023.

PwC noted that trends seen in the nine months to the end of September last year were slightly reversed during the last three months of the year.

At the end of September, insolvency numbers were running 34% higher when compared to the same period in 2023. However, between October and December they were in fact 21% lower compared to the same period in 2023.

“This highlights that the Irish economy and many Irish businesses continue to demonstrate resilience,” PwC said.

According to the figures, retail companies accounted for 200 of the 852 insolvencies during 2024 or 24%.

Hospitality insolvency numbers remained steady but remains one of the most challenged sectors. In total, 150 insolvencies were recorded in the sector.

Dublin accounted for over half of all insolvencies last year, with 440.

The average lifespan of a company declaring insolvency in 2024 was 13 years, according to PwC. The shortest business lifespan was 10 months while the longest being almost 60 years.

The use of the Small Company Administrative Rescue Process (SCARP) remained low in 2024 with 30 being initiated last year compared to 33 in 2023. Approximately only one in every 20 insolvent companies are opting for a rescue process such as SCARP or examinership.

SCARP is a process that allows viable small and micro companies experiencing difficulties to restructure with the agreement of creditors. It is initiated by the directors of the company concerned and has limited court involvement where creditors are actively engaged and are positively disposed to a rescue plan. PwC said:

The underutilisation of this relatively new rescue process suggests that most insolvent companies have fundamental profitability issues and are opting for liquidation rather than a rescue process.

The firm also said receivership appointments in 2024 fell by 13% compared to 2023, with 98 recorded in 2024 with lenders continuing to show a lot of patience in line with the past few years.

Business recovery partner at PwC Ken Tyrell said the reversal in insolvency trends seen at the end of the year is “good news for the economy and businesses”.

He added that the lower than expected final tally “may be due to an economy that is performing well, easing inflation, cautious but steady consumer sentiment, a positive sentiment following Budget 2025 and strong fiscal receipts”.

However, Mr Tyrell added that “nothing is certain” as businesses will need to deal with a higher cost base in 2025 alongside “Ireland’s economic outlook being partially clouded by potential international macro-economic and geo-political headwinds”.

PwC said this year businesses will have to contend with an increasing minimum wage, energy costs, continued but lower inflation and auto-enrolment.

“However, Irish businesses are demonstrating resilience, with a focus on transforming their operations to be fit for the future,” the firm said.

“As always, we expect there will be a strong focus on cash flow and working capital during the early months of the year for small businesses. In particular, retail and hospitality businesses will be encountering a quieter and more challenging trading period after a busy end to 2024 and will be working to adjust their cost base accordingly,” PwC said.