The first six months of the year saw a 48 per cent year-on-year increase in insolvencies, with significant collapse growth in key sectors including hospitality, construction and financial services.
There were a total of 410 insolvencies recorded in the period, versus 277 for the same period in 2022, according to the latest figures from credit risk analyst CRIFVision-Net.
Despite the relative health of the Irish economy the first half of 2023 has been a period characterised by continued global macro-uncertainty and inflationary pressures. The period saw significant insolvency growth in key sectors including hospitality (214 per cent), construction (148 per cent) and financial services (37 per cent).
Dublin (35 per cent) and Cork (65 per cent) both recorded double-digit growth in insolvencies, while other major urban populations like Limerick (-43 per cent) and Galway (-19 per cent) performed more positively, recording significant decreases in insolvencies.
Overall there was a 7 per cent increase in company start-ups, with a total of 20 counties recording year-on-year increases.
Key economic centres Dublin (7 per cent), Cork (5 per cent) and Galway (8 per cent) all recorded modest year-on-year growth. Limerick (-6 per cent) was the only large urban population to record a decrease in new start-ups.
Economic bellwether sectors such as hospitality (12 per cent), property (10 per cent), IT (9 per cent), financial services (6 per cent) and construction (6 per cent) all recorded growth, albeit from a relatively low 2022 baseline.
Meanwhile, another key industry, manufacturing, saw a 9 per cent decrease in new start-ups.
May was the busiest month for new company start-ups (2,527), while February proved quietest (1,723).
CRIFVision-Net managing director Christine Cullen said evaluating the first six months of the year was “a far from straightforward exercise”.
“At a global level we continue to grapple with economic uncertainty, high interest rates, and a rising cost of living,” she said. “Despite these macro-economic pressures the Irish economy has on balance proven more resilient than some of our neighbours.”
Ms Cullen pointed out that corporate tax receipts were up and that the Government’s coffers currently enjoy an €8 billion budget surplus.
“That said, the continued rise in insolvencies is a reminder that these headline numbers don’t tell the full story,” she added. “As we turn our attention to the second half of the year we hope to see a more business sentiment amongst Irish consumers and SMEs, and that this sentiment will materialise as a confidence, growth-orientated mindset going into 2024.”
