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Caution despite company failure drop

Figures released today indicate that the rate of company failures is slowing down, as the number of companies going bust fell for the third month in a row.

InsolvencyJournal.ie said there were 112 insolvencies recorded in May, down 26% from the 2010 high of 151 recorded in February.

But total insolvencies for the year so far are still more than 25% ahead of the same period in 2009 - 652 this year compared with 512 last year.

The compilers say a similar dip in figures was also recorded this time last year, when company failures dropped in both April and May before increasing significantly in the second half of the year.

Dublin continues to account for the majority of failures with 263 insolvencies in the year-to-date - 40% of all insolvencies. Construction accounted for 28 of the 112 insolvencies in May.

'At this stage it is too early to tell whether the decline in failures indicates an improvement in the economy or just another seasonal dip in figures, said Ken Fennell, partner with Kavanagh Fennell.