A survey has shown that a total of 8 companies a day went bust throughout the month of May and figures also show that people are now shying away from starting a business.
The survey was conducted by vision.net.ie and it showed that court-ordered liquidation are up to 50% and for the first time more than 1 in 2 companies are now showing signs that are consistent with business failure.
Figures show that 1,181 people chose to become a company director for the first time in May , this is down a huge 42% from the same time last year.
Vision-net.ie director Christine Cullen commented: "The sharp drop in 1st time company directors is letting. It is impossible to say with certainty what may be influencing this, but the lack of finance options for would-be entrepreneurs and people adopting a more cautious approach are among likely factors"
Ms. Cullen added that the rise in court-ordered liquidations signals a hardenning of the position being taken by debtors and by the courts.
Figures show that 84% of the liabilities for companies which closed during May are unsecured creditiors, this meaning that unpaid debts will most likely not be realised.
Of the 93 million euro owed to creditors from meetings, more than 40 million euro was in the retail and wholesale sectors.
Overall, 155 liquidators were appointed in May, compared with 190 in April. There was 44 receiverships, compared with 64 on the previous month.
Vision-net also carried out credit rating stress tests on 13,414 private limited companies who have filed accounts in the past 5 weeks and 14% of these firms suffered a worsening of their credit rating. This means that 55% or 7,431 of those companies sampled are now in the high-risk category.
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