AVALANCHE OF COMPANY FAILURES CONTINUES
“More Than 2,000 Irish Companies Set To Fail This Year.” It is the sort of headline that once might have appeared on the front page of the Sunday Business Post but space for bad business news is at such a premium these days, it only made page six of last weekend’s edition. As what it called the “deep malaise” in the property and retail sectors spread to all areas of the economy, the Business Post carried a report from accountancy firm FGS which predicted a new record of company failures in 2010. The number of firms that will go into liquidation, receivership and examinership will rise by more than 500 on last year – the rate of insolvencies is increasing by 8 per cent a quarter and there is no sign of it slowing down.Given the continued avalanche of bad news, combined with the ongoing sense of uncertainty, it was unlikely that consumers would resume their previous spending habits or that credit would begin to flow in 2010, FGS predicted. And the report made no attempt to sugar the pill. It pointed out that the insolvency figures did not give the full picture, noting a “significant slowdown” in the number of new start-up companies. The number of start-ups in construction and real estate has fallen by 35 per cent and 63 per cent respectively – there were fewer new companies in the first quarter of 2009 than in the comparable period 12 months earlier.
Forty-five per cent of all company failures last year were in the Dublin area but the “surge in insolvencies” was not restricted to the east with the effects rippling out to counties which had not experienced major levels of corporate failure up to now.