- by VisionNet on 30/03/2012
For every Irish company that gets off the ground another one collapses, according to Vision-net, Ireland's leading business and credit risk analyst, whose latest figures reveal that five firms failed each day last month.
Vision-net's figures show that 149 companies were declared insolvent between March 1 and 29 - up 5% on same period last year.
Last year recorded 14,663 start-up companies - but 14,574 collapsed, showing growth of just 1%.
In 2007, before the recession began, 18,808 companies got off the ground against 8,573 firms that went to the wall, showing growth of 119%.
Of the 149 companies that collapsed last month, 92 were liquidated and 57 entered receivership.
Twice as many companies entered receivership last month compared with last March.
The number of meetings of creditors last month reached 95, with these companies owing their short-term creditors more than €42 million.
The rate of start-up company growth has dropped by one-fifth on the same month last year while 2,577 registered business names were recorded, up 26% on last March.
Company incorporations amounted to 1,095 - down 19% on last March.
The professional services sector is showing the strongest signs of growth, absorbing 25% of all start-up companies, followed by the wholesale and retail sector with 12% and social and personal services recording 11%.
Just 3% of companies are forming in the motor and real estate sectors, respectively, while the hospitality sector is recording 6% of new firms.
Vision-net stress-tested 11,399 companies last month and found that just over half of them were at risk of collapse, with 18% deemed medium-risk and 31% judged to be low-risk.
Last month, 361 registered consumer and commercial judgments worth €20.2 million were awarded in the courts, with 233 consumer judgments accounting for €15.9 million of that amount.
Of these consumer judgements, 93 were awarded to the Revenue Commissioners worth €3.9 million, 45 to credit unions worth €695,000, and twenty to the banks worth €8.5 million.
Christine Cullen, Managing Director of Vision-net, said the figures show that growth in the domestic economy has flat-lined as businesses struggle to stay afloat.
"The domestic economy is in a zero-sum game scenario, with almost as many companies getting off the ground as there are collapsing, and consumer demand remains stagnant."
"The high attrition rate among Irish companies means that they are leaving behind huge amounts of legacy debt which is stifling the growth prospects of other businesses, and that trend is hampering our capacity to trade our way out of recession."
"However, it is clear that the more companies research the marketplace, including performing simple credit checks, before making critical business decisions the better we can anticipate the trading environment, avoid pitfalls and respond to where there is still demand in the economy," said Ms Cullen.
Consumers and business people had 304 judgments worth almost €34 million awarded against them in court last month as creditors fought to get debts paid, according to the latest figures from Vision-net, Ireland's leading business and credit risk analy