Insolvency rates among firms are rising, but business failure remains at historically low levels, an analysis by PwC has concluded.

In its latest Insolvency Baromoeter, PwC reported that insolvencies were up by a third in the first nine months of the year to 468 compared to the same period last year.

The final quarter of the year is generally the busiest for business failure, it noted.

It forecasts total insolvency numbers to reach in the region of 650 for the year.

That would compare to around 539 in the whole of 2022.

The barmoter uncovered an annual failure rate of 25 companies per 10,000.

"This is 79% higher than the lowest level of insolvencies recorded in 2021 - when there were 14 - but still remains lower than pre-pandemic levels," the report stated.

"While there has been an increase, business failures remain at historically low levels."

The pre-pandemic level of insolvency was 36 per 10,000 recorded in 2019.

The Small Company Administrative Rescue Process - or SCARP - continues to be used by relatively few businesses, despite being in existence for two years now.

SCARP is a formal insolvency process which enables a restructuring of a business by way of a compromise arrangement between a company and its creditors where a proportion of debts are often written off.

While accounting for less than 4% of all insolvencies in the last two years, appointments are expected to increase next year.

The report notes that 6,000 companies with an average warehoused debt of around €300,000 will be looking to enter into negotiations with the Revenue ahead of the May 2024 deadline.

The retail sector had the most failures in the last 12 months with arts and entertainment and hospitality remaining close to the top of the list.

Dublin was the county with the highest insolvency levels in the first nine months of this year.

"In an environment where inflation remains high and the cost of doing business is not abating, insolvency levels are on the rise, though compared to pre-pandemic levels, are still relatively low," Ken Tyrrell, Business Recovery Partner with PwC Ireland said.

He added that levels were expected to increase up to 2024.

"In the face of market disruption, geopolitical change and high profile challenges across different industries, businesses continue to feel the effects of an uncertain market with restructuring activity rising and risk of shocks remaining. Creating a cash-conscious culture is critical to ensuring organisations can improve their resilience and flourish in the future," he concluded.