There has been a marked increase in the number of companies going out of business in the Republic and Northern Ireland, according to new figures, released by Dun & Bradstreet.
The figures show that 638 businesses in the Republic were liquidated last year, compared to 519 in 1997. Dun & Bradstreet's (D&B) managing director Mr Greg Connell said the high failure rate can be attributed to the huge growth in new company formations during the 1992-1995 period.
He said D&B estimates "real growth of 8.6 per cent for 1998, though the country will face somewhat weaker GDP growth this year, as export volumes fall due to the strength of the euro visa-vis the US dollar and weak demand from important export markets like the UK".
Mr Paul Rooney a partner in PricewaterhouseCoopers, financial advisory services division, said that the figures were only slightly up on 1997, which was one of the best years for economic growth in a decade. "There are indications that while business performance is not falling as fast as business confidence, there are problems nonetheless."
Mr Rooney said job losses in some sectors are being countered with skills shortages in others, while exporters are still cutting margins to maintain overseas market share. "There are clear signs that the services sector is now slowing," he said.
Mr Rooney added that the combination of static sales and rising costs on reduced margins "is always worrying, while the increased transparency afforded to overseas competitors by the arrival of the euro is clearly of concern to local manufacturers".
The figures for Northern Ireland showed 499 business failures last year - up from 465 in 1997. Mr Jonathan Cushley, Dun & Bradstreet, said while the figures are discouraging "the rise isn't as severe as had been expected". He said the most worrying indication for the local economy had been the fact that the liquidation of "traditionally large limited companies increased during the last quarter [of 1998] by 46 per cent".
Mr Cushley said the majority of Northern Ireland businesses are sole traders and partnerships, and bankruptcies among these types of business have levelled off, remaining flat in the last quarter.
