Three firms a day declared insolvent

The number of companies that went out of business in January dropped 34 per cent compared to the previous month, but high levels of insolvency are expected to continue throughout 2010.

Statistics from website InsolvencyJournal.ie show three businesses were declared insolvent every day in January, compared to five per day in December. However, the figures are still a fifth higher than for January 2009.

Leinster was worst hit by failing businesses, accounting for 70 per cent of total insolvencies. Within the region, 71 per cent were based in Dublin. Munster accounted for 17 per cent, while Ulster and Connaught had only 6 per cent and 7 per cent of the total.

The number of companies that went into receivership in the first month of the year also increased, with 21 receivers appointed to 21 companies, a 200 per cent rise on December 2009.

Ken Fennell of Kavanagh Fennell, the accountancy firm behind InsolvencyJournal.ie, said building firms were being particularly hard-hit.

"Overall, the recent findings show that construction is still the worst-affected sector, with 32 firms going out of business in January – 33 per cent of the total," he said. "Insolvencies in the sector, however, were down significantly on previous months, dropping 35 per cent from the December total of 49 which suggests that the industry may be over the worst."