New figures from credit risk analyst CRIFVision-Net show that the number of company insolvencies increased by 70% year-on-year in the first three months of 2023 compared to the same time last year.
CRIFVision-Net said the figures for January, February and March suggest that inflationary pressures have added further concern for businesses, with a rise in insolvencies in ten counties.
Economic sectors such as hospitality (767%), manufacturing (375%), retail (167%), computers (125%), construction (117%) and leasing (67%) all recorded significant increases in insolvencies.
Insolvencies are up in 12 out of the 16 sectors analysed, with only legal, accounting and business, real estate, electricity, gas and water supply and mining decreasing on an annual basis compared with 2022.
Kildare, Wicklow, Mayo, Meath, Sligo and Clare recorded the highest year-on-year increase for insolvencies in the first quarter of the year.
Kerry, Kilkenny and Tipperary were the only other counties to record a decrease for insolvencies.
Today's data also shows a decrease of 0.8% in the number of start-ups during the three-month period for 2023 when compared with January, February, and March of last year.
Increases in the number of start-ups were seen in just eight industries in the first quarter, including public administration and defence (160%), fishing (120%), agriculture (43%), electricity, gas and water supply (11%), health and social work (11%) and real estate (4%).
But a bright spot in the data was seen in the number of companies dissolved for the three-month period, which have decreased by 4% compared to the same period last year.
March alone saw 2,013 new company start-ups, an increase of 233 when compared with 1,780 for the same month last year.
A total of 13 counties experienced a year-on-year increase in new company registrations in the three month period under review.
Roscommon saw a total of 20 new start-ups, recording the highest percentage growth at 57%, while Sligo recorded 18 (up 50%), Offaly recorded 20 (up 43%), Kilkenny recorded 29 (up 36%), Cavan recorded 13 (up 20%) and Kerry recorded 25 (up 20%).
Christine Cullen, Managing Director of CRIFVision-net, said that start-ups have faced tough economic challenges in the first three months of this year, which really started to take hold in the same three month period in 2022 following the invasion of Ukraine.
"Since then we have faced a combination of a rising cost of living, energy insecurity and further geopolitical uncertainty. This economic headwind has fed through to the start-up sector where the effect on bellweathers like hospitality and retail is starting to show," Ms Cullen said.
She noted that 2022 was the lowest point for the number of new start-ups in Ireland in six years with a 16% change on 2021.
The first quarter of this year has started weaker than last year which suggests some challenging times ahead, she added.
"But there is reason for some cautious optimism seen through the decrease in the number of dissolved companies, as well as a marginal increase in the number of new start-ups formed last month when compared with the same month last year," Ms Cullen said.
"Half of all 26 counties recorded an increase in start-up growth in Q1 of this year suggesting a significant entrepreneur resilience in testing economic times and there are still many businesses willing to invest in new ventures," she said.
