There were 4,082 new companies formed in the Republic between April and June this year, a decline of 14 per cent compared with the same period in 2007, according to the Bank of Ireland's business start-up barometer.

The report said that while company formation was slower than last year, the rate of decline was less than the 22 per cent difference between the first quarter of 2008 and the previous year.

With the construction sector under severe pressure the number of new firms set up in this area was 260, a 45 per cent fall on the same period last year. There were 304 construction companies set up in the first three months of this year.

An indicator of the widening economic slowdown can be seen from the 32 per cent decline in the number of accounting and bookkeeping firms set up in the second quarter compared with the January to March period.