- by VisionNet on 22/12/2012
Marginally more Irish companies began trading this year compared to those that failed, indicating that the domestic economy is still flatlining, according to year-end figures from Vision-net, Ireland's leading business and credit risk analyst.
Vision-net's figures show that, this year, 13,104 companies got off the ground, compared to 12,708 that closed, showing a net gain for the domestic economy of 396 firms.
On average, this represents 1,092 company start-ups and 1,059 business failures per month in 2012.
Between January 1 and December 16, 1,844 Irish companies were declared insolvent, an average of 5 companies per day - down 5% on the same period last year.
Of these, 67% were liquidated, 32% entered receivership, and an examiner was appointed to 1% of cases.
The figures show that almost half of the recorded insolvencies were in Dublin (44%) while the next highest number was recorded in Cork (7.8%).
Liquidator appointments are down 13% while receiverships are up 21% for the same period last year.
Companies in the business and professional services and wholesale and retail sectors accounted for 26% and 12% of new companies, respectively, while new companies in the IT sector accounted for 8% of total new companies in 2012.
According to their latest filed accounts, 1,193 companies that held meeting of creditors this year - down 10% from same period in 2011 - owed their short-term creditors more than EUR820.9m.
In the first 11 months of 2012, Vision-net's figures show that 5,481 commercial and consumer judgments worth EUR357.5m were awarded in the courts, with 3,684 consumer judgments accounting for EUR297.6m - 83% of the total value of awards.
The Revenue Commissioners topped the list of plaintiffs, with 1,292 judgements against consumers totalling more than EUR54 million.
Banks accounted for 363 consumer judgements valued at more than EUR129 million while credit unions recorded 708 million consumer judgements amounting to over EUR12 million.
The number of commercial judgments awarded in the courts was 1,797, with over EUR17 million awarded to banks in 60 separate judgements.
In looking back to start-ups in 2008 and 2009 and evaluating their current status, Vision-net's figures show that 14,822 and 13,478, new companies were set-up, respectively. Of these, one thirds of new companies set up in 2008 are now dissolved while one quarter of those set up in 2009 are gone bust.
Christine Cullen, Managing Director of Vision-net, said the figures show that 2012 has been another challenging year for the economy.
"While 2012 has been another tough year for Irish business with challenging trading conditions and difficulty in raising finance, it is encouraging to see that the number of new companies - almost 14,000 - set up in 2012 outpaced those that failed."
"The slowdown in the number of businesses failing may correspond to recent CSO figures which indicated a slight growth in the Irish economy during Q3, 2012. Hopefully this trend can continue into next year."
"In terms of start-ups, traditional businesses in the professional services and wholesale and retail sectors remain most popular with these sectors absorbing 38% of new companies between them. Despite a booming IT sector, the industry accounted for only 8% of new start-ups in 2012 which is surprising given the rate at which Ireland is investing in this sector."
"The significant increase in the number of receiverships reveals the extent to which credit institutions are now pursuing unpaid debts. However, the drop in insolvencies and liquidations in 2012 in particular, coupled with a fall in the number of winding up meetings are all positive indicators and tentative signs that give rise to optimism for 2013".
The number of businesses collapsing this month is down by 32% compared to the same month last year, according to the latest figures from Vision-net, Ireland's leading business and credit risk analyst.
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